Since 2009, the time Bitcoin launched has continued to gain traction among investors and traders alike. However, one debate that is still significantly rife among Bitcoin users is the difference between “Blockchain” and “Bitcoin.” It is shocking to find that despite the increased adoption of Bitcoin and blockchain technology to power several crypto-related projects, there are still so many people out there that still do not know the actual meaning of these two terms. As such, this article seeks to explain what the difference between blockchain and bitcoin is.
Before we dive deeper to differentiate between these two terms, let’s quickly mention here that blockchain is a technology that powers most cryptocurrencies, and bitcoin is a cryptocurrency itself. For the benefit of those that are new in the crypto space, cryptocurrencies are virtual assets that we can’t touch, lack government regulations, lack third-party activities, and can be used to pay for goods and services, just like our usual paper (FIAT) currency.
To begin, let’s define what bitcoin is and what is blockchain.
What Is Blockchain?
At its core, blockchain is a computerized system that records information in such a way that it is impossible to hack, change, or cheat the system. In other words, blockchain is a payment gateway or a digital ledger that records transactions across the entire network. Blockchain permits the transaction involving two persons in a secure and tamper-proof manner.
So many crypto enthusiasts believe that blockchain is a new technology that powers the functioning of cryptocurrency; while this is true to some extent, blockchain has actually been in existence since 1991, only that it became more prominent since the launch of Bitcoin in 2009.
Up till this moment, the government still finds it difficult to regulate blockchain, and the reason is not far-fetched. Blockchain is a decentralized technology. What does this mean? Blockchain cannot be tied to one person’s control. Plus, it is composed of three important elements – nodes, miners, and blocks.
Let’s briefly take a look at each of these elements.
Blocks contain all the important information about a transaction. They are stored chronologically on the blockchain. In other words, blocks permanently store information – any transaction that goes into the block cannot be removed or altered. Also, each block comes with a unique hash.
Miners are the individuals who create these blocks we explained above. Blocks are mined every 10 minutes on the blockchain. The process of mining blocks is complex. Based on a cryptographic hash algorithm, miners compete to solve complex mathematics. They also validate all transactions and record them on the blockchain.
Nodes are an important element, of which through them you can understand the decentralized nature of the blockchain. With nodes in place in the blockchain, no single individual can take ownership of the blockchain. Nodes help the blockchain to maintain privacy and prevent a breach of integrity.
By now, we expect that you understand the meaning of blockchain and the three elements it is made up of. Let’s now proceed to define what bitcoin is.
What Is Bitcoin?
Created in 2009 by Satoshi Nakamoto, Bitcoin (with symbol BTC) is the first cryptocurrency or virtual currency to use the power of blockchain technology. Compared to traditional payment methods, transactions involving bitcoin are free from government regulations and third-party activities. In short, bitcoin transactions come with a low processing fee, unlike what a bank would charge you to send money to a friend or family member.
To use Bitcoin for payment of goods and services, you need a digital wallet. This wallet will help you store, send, and receive Bitcoin payments from anywhere in the world. While there are several digital wallets, before you download anyone, ensure you do your due diligence so you don’t download a fake wallet.
How Do I Get Bitcoin?
There are several ways to get Bitcoin, and this section will cover that.
#1. By Trading
The simplest and probably most used way to get Bitcoin is to exchange your paper money for Bitcoin. You can do this using a crypto exchange. An exchange is simply a platform that allows the buying and selling of Bitcoin and other cryptocurrencies. While there are several exchanges, the leading ones are Binance and Coinbase.
Once you exchange your paper money for Bitcoin, you can trade Bitcoin for profits. Your best bet would be to buy when the price is low and sell when the price increases. There are so many trading strategies, so find out the strategy that works for you and stick to it.
Remember we talked about the activities of miners while discussing blockchain? If you are a Miner, you would be rewarded with Bitcoin upon successful hashing of a block. Mining is capital intensive; as such, a lot of people do not like to go into it.
#3. Payment For Service Delivered
If you are an online entrepreneur, you can receive Bitcoin for services delivered to your clients. Once you complete a job for a client, you can request the client to pay in Bitcoin by sending BTC to your digital wallet.
What’s The Difference Between Blockchain And Bitcoin? – A recap
Before we wrap up the article, let’s quickly summarize the differences between Bitcoin Vs. Blockchain:
- Bitcoin is the first cryptocurrency to hit the crypto market, while blockchain is a digital ledger that fuels cryptocurrency transactions.
- Bitcoin uses blockchain technology for secure and anonymous transactions, while blockchain promotes transparency.
- Bitcoin holders can use Bitcoin to pay for goods and services, while blockchain is used to transfer not just currency but so many things, including property ownership rights, digital assets, and valuable information.
As you can now see, Bitcoin and Blockchain are clearly two separate entities.
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