Cryptocurrency, Bitcoin and Blockchain: What's the Difference?

Cryptocurrency, Bitcoin and blockchain are terms that are often used interchangeably, but they are not the same thing. Cryptocurrency is a medium of exchange, like the US dollar, but it is digital and uses encryption techniques to control the creation of monetary units and verify the transfer of funds. Bitcoin is the name of the most well-known cryptocurrency, the one for which blockchain technology was invented. Blockchain is the technology that allows cryptocurrency to exist (among other things).

Ethereum, Cardano, Polkadot and Stellar are some of the other popular cryptocurrencies. Bitcoin Cash (BCH) is one of the first and most successful hard forks of the original Bitcoin. Atomic exchanges are a mechanism in which one cryptocurrency can be exchanged directly for another cryptocurrency, without the need for a trusted third party. Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies are decentralized networks based on blockchain technology, a distributed ledger enforced by a disparate network of computers.

Bitcoin is the most popular cryptocurrency and was created in 2009 as an alternative to traditional fiat currencies. Ethereum is another popular cryptocurrency that was created in 2015 and has since become one of the largest cryptocurrencies by market capitalization. Cardano is an “Ouroboros proof-of-stake cryptocurrency” that was created with a research-based approach by engineers, mathematicians and cryptography experts. Polkadot is a blockchain protocol that allows developers to create their own blockchains and use the security that the Polkadot blockchain already has.

Stellar is an open blockchain network designed to provide business solutions by connecting financial institutions for large transactions. Cryptocurrency is not issued or backed by any bank or government, nor does an individual cryptocurrency have value as a commodity. Despite not being legal tender in most parts of the world, cryptocurrency is very popular and has prompted the launch of hundreds of other cryptocurrencies, collectively referred to as altcoins. Cryptocurrencies typically use decentralised control as opposed to a central bank digital currency (CBDC). When implemented with decentralised control, each cryptocurrency operates through a distributed ledger technology, typically a blockchain, which serves as a public database of financial transactions.

Faisal Abdul
Faisal Abdul

Extreme internet specialist. Wannabe twitter junkie. Friendly zombie geek. Freelance twitter buff. Professional student. Passionate tv evangelist.

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