what is the difference between blockchain and Bitcoin? What is the use of blockchain? A blockchain is an immutable (unchangeable) digital ledger managed by a decentralized network. A blockchain is a database where transactions are not controlled by a single party and the entire transaction history is recorded. The first example of blockchain usage is Bitcoin (BTC), which was created in 2009. So how is blockchain different from Bitcoin? Let’s find out together.
What is the difference between Blockchain and Bitcoin?
Blockchain – Conceptualized in 1992, blockchain technology is a secure, decentralized and distributed database for recording time-stamped transactions.
Bitcoin – Launched in January 2009, Bitcoin was the first successful attempt to create and distribute digital currency, and the Bitcoin blockchain represented the first real-world application of blockchain technology.
As defined by its founder Satoshi Nakamoto, Bitcoin is “a new type of electronic cash system that is completely peer-to-peer, with no trusted third parties.” The Bitcoin protocol was created to securely record Bitcoin transactions between users using the blockchain.
How does the blockchain work?
A simple blockchain explanation is to imagine a long chain of interconnected data, organized into blocks to form a chain. Each block is capable of holding a predetermined amount of data; when it is filled, it is forged into the chain and forms a new block.
As the chain progresses, it is impossible for all previous blocks to change. All data entering a new block must be verified by a majority of the computing power of the decentralized network. This decentralized network is made up of nodes—devices connected to maintain the integrity of the network, whose decisions are based on the accuracy of current transactions and all data previously confirmed as accurate in closed blocks.
In this way, it is almost impossible for the blockchain to be compromised by any single user. Nodes that validate new blocks added to the blockchain are rewarded for their efforts, usually in the form of digital assets they are validating.
What is the use of blockchain?
While bitcoin and other cryptocurrencies are by far the most common users of blockchain technology, it does have other applications.
A fast-growing area of blockchain is non-fungible tokens (NFTs), which give buyers ownership of digital assets, such as music and videos. It is also used to secure title to real assets such as precious metals and land. Even the traditional fiat banking system is starting to leverage blockchain for safer and more efficient transfers of money and credit products.
Businesses are using blockchain to enter into smart contracts that can only be executed when all parties have fulfilled their obligations, reducing the risk of fraud. Large corporations are also using the technology to solve complex production, inventory and supply chain problems on a global scale.
The government is even considering using blockchain to prevent voter fraud in future elections.
What are the types of blockchain?
Today, there are thousands of blockchains in operation, and many more projects plan to launch their own blockchain innovations soon. Each of these blockchains is unique – but three main types can be used to categorize most of them:
Public Blockchains – Public blockchain networks typically run on native tokens. These networks are vast and widespread, and anyone at any level can access them. They are based on a large number of nodes, so they have the highest level of security and immutability of information. Bitcoin’s protocol runs on the public blockchain. They usually use open source code.
Permissioned Blockchains – These blockchain networks are large distributed systems that use native tokens, but with controlled access levels for each user. They don’t always run on open source code. The most well-known type of permissioned blockchain is Ripple.
Private Blockchain – A private blockchain network is a technology used in a company, business or organization. They are usually small, don’t use tokens, and have tightly controlled access to the database. Private by definition, they have a reduced number of nodes and a high probability of the owner changing the information stored in each node. Therefore, the level of tamper resistance of private blockchain networks is at least arguable.
In general, the above content introduces the difference between blockchain and Bitcoin in detail, as well as the answers to related questions about blockchain. I believe you will understand after reading it. In conclusion blockchain is a system for recording information, storing data and facilitating transactions. The revolutionary aspect of this technology is that it is extremely difficult or impossible to tamper with, crack, alter or modify records due to its structure.
View Also –