Most of the time, cryptocurrency, Bitcoin and blockchain are mentioned together. Yet they can be quite confusing for those who don’t know much about it. While these activities and terms are not interchangeable, it is
extremely important to understand the relationship between them. And to comprehend, how they work synchronously, you must know the difference between blockchain and Bitcoin, first.
Blockchain is a concept, where just as websites are used to store and share information, blockchains are used to accomplish this task in the form of data blocks. In contrast, Bitcoin is an example of a cryptocurrency and is also one of the most popular ways of using blockchain. Simply put, blockchain is a data storage facility, an open distributed ledger system that is decentralized or duplicated across several computing devices. While most traditional systems work with a central administrator and are subject to verification, blockchain remains extremely secure despite this transparency. Hackers don’t get to target just one vulnerable portion. Thus, blockchain is resistant to manipulation because cryptic proofs link all the blocks together. Intensive computational activity or mining is involved every time new blocks have to be produced.
Bitcoin is a type of cryptocurrency and the first one of its kind. Introduced sometime in 2009, and developed by Satoshi Nakamoto, it was created primarily to work as an independent currency system that is based on cryptography and uses mathematical proofs. Once the Bitcoin reaches its maximum limit of supply, no more of them will be made available. The supply limit is up to 21 million units (this varies amongst projects), which is generally public information. The price of the Bitcoin is also available on the public domain for review, just as is the copy of the code.
Applications of blockchain
Both blockchain and bitcoin are inseparable. But blockchain actually has wider usage and can go beyond cryptocurrency. It can execute smart contracts, maintain a transparent record system that can be shared, audit the supply chain, and provide proof of insurance.