What is Blockchain, Bitcoin and CryptocurrencyA brief introduction to the differences between these important but often interchanged terms
Frequently the terms blockchain, Bitcoin and cryptocurrency are used interchangeably, as if they were “one and the same thing”, but of course, there are differences which we will explain here.
Crypto terms and definitions explained
The three words have the following definitions:
- Blockchain – If you are wondering what is Blockchain, it’s an enabling technology, which facilitated the existence of cryptocurrencies and also is an enabler for many other applications too (see below)
- Cryptocurrency – A cryptocurrency is a form of digital currency which uses blockchain technology as an exchange medium. Powerful encryption functionality is used to control the creation of new currency and also in transferring cryptocurrency funds
- Bitcoin – is a word often used instead of cryptocurrency but is actually the name of the most well-known cryptocurrency. Invented in 2009, Bitcoin is just one of many cryptocurrencies and is popular and still to this day is the most well-known. New Bitcoins are earned/created as a reward for an activity process called mining
What is blockchain technology?
In the answer to what is blockchain, a blockchain occurs where a decentralised ledger of transactions is accessible via a peer-to-peer network (a network where two or more digital devices share files and access). Using blockchain technology, peer participants can verify transactions themselves without the need for a central authority and clearing function. This opens up the use of blockchain technology to a large variety of applications.
Blockchain is a collaborative technology which in the future will increasingly be used worldwide for business process design, enhancement, and management. Blockchain has many uses therefore in BPR (business process reengineering). In what many see as “next generation software.” Blockchain technology will reduce the cost, time, and complexity of collaborative process transactions.
5 popular blockchain applications
There are a vast number of potential blockchain applications, as well as cryptocurrencies, five popular examples include:
- Health records storage and sharing
- Insurance case handling
- Music royalties tracking
- Property conveyance
- Supply chain logistics
What is a cryptocurrency?
A cryptocurrency is a form of digital currency, which is digitally secured through cryptography, through methods such as public-private key pairs, elliptical curve encryption, and hashing functions, etc.,
Often also called a “virtual currency” cryptocurrency is almost impossible to counterfeit and cannot be double-spent. So, the name “cryptocurrency” originates from its security method, i.e., it is a cryptographically secure currency.
Encryption methods for cryptocurrencies are immeasurably better than security used for traditional coins or notes and are renowned for their ease of exchange (i.e., no dollars, yen, or euros to worry about), divisibility, and inflation-resistant qualities.
Many investors now consider it essential to have some cryptocurrency as part of a balanced investment portfolio.
Secure online payments
As with traditional currencies, cryptocurrencies allow for ultra-secure payments to be made online and are extremely likely to grow with e-retailers as a payment option in years to come. Examples of sites, which accept cryptocurrencies as a form of payment are:
- com – a well-known online US retailer
- Gyft (which allows you to buy gift cards from thousands of retailers (e.g., Amazon, Dell, iTunes, Starbucks, etc,) and
- PayPal (which mean that 30+ million PayPal merchants are accessible for transactions)
Tesla were taking Bitcoin payments earlier in 2021 until environmental concerns were raised but it’s very likely they will start again. There have even been rumors of Amazon accepting crypto payments or at least getting more involved with crypto.
One thing is for sure, acceptance and adoption of cryptocurrencies like Bitcoin is growing in a huge way,
Types of cryptocurrencies
There are now literally thousands of diverse types of cryptocurrencies available to trade-in. Bitcoin is the most popular with many of the currencies being Bitcoin forks or clones. Popular cryptocurrencies other than Bitcoin include Ethereum (ETH), Litecoin (LTC), Binance Coin (BNB), Cardano (ADA) and Solana (SOL).
No jargon, just plain “crypto” English when you contact Opace
Do you love speaking plain English? If so, you will love speaking to our team of experts, who love crypto, technology, and also speaking business. Don’t delay, contact us today to discuss all your questions relating to blockchain, Bitcoin, cryptocurrency, and any other related topics.
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