What Are the Major Differences between Blockchain and Bitcoin?

Over the years, cryptocurrencies have been a hot topic all around the world. Also, many people invested heavily in digital assets and generated millions of dollars in return. As a result, the crypto industry has developed into a trillion-dollar market.

Nevertheless, many people still hesitate to enter the crypto space due to its many confusing terms. For instance, some don’t know the differences between blockchain and Bitcoin. And, who can blame them?

Bitcoin is a cryptocurrency but also a blockchain. However, the blockchain is not necessarily Bitcoin.

This truth, so easy to grasp for crypto experts, escapes the neophytes. And, if you are new to cryptocurrencies, you are right to feel confused. But don’t worry! We are here to clear the air and ease your first steps into the cryptosphere.

Read on to discover how Bitcoin is different from the blockchain and vice-versa!

What is Blockchain?

The term “blockchain” refers to a decentralized network that stores its copy in real-time on multiple computers, a.k.a. nodes. Generally, it acts as an open-source ledger, which means that anyone can connect and contribute to it.

Blockchain is a technological breakthrough because it allows the storage and sharing of information conveniently and securely. Also, it is immutable, which means that it only records data that other nodes consider accurate. And, once it validates it, the data join the chain in a “block” that no one can alter or hack.

One of the unique features of blockchain is its decentralized nature that originates from its ledger technology. In the centralized and traditional financial industry, only one central authority can manage the records. On the other hand, blockchain transactions are transparent without compromising their security, and user consensus verifies the data. So, the need for intermediaries or third parties disappears.

Blockchain technology is older than cryptocurrencies. For instance, its story started sometime in 1991, almost two decades before the first crypto asset, Bitcoin, surfaced. Today, the blockchain is the ideal environment for the trading and development of cryptocurrencies.

Blockchain consists of three components:

Blockchain Blocks

Blocks are the central and most critical parts of blockchain technology. For instance, they are responsible for carrying all the appropriate information regarding a particular transaction. Also, each blockchain contains a unique nonce and hash stored chronologically and linearly at the end of the chain. The more the chain increases, the more challenging it gets to reverse, disrupt or manipulate the chain.

Blockchain Miners

Miners are responsible for creating the blocks that constitute the blockchain. Mining in blockchain technology is exceptionally complex. For example, the miners are responsible for confirming and recording new transactions and creating new cryptocurrencies. The mining process adds new blocks to the existing blockchain and ensures that the transactions are accurate.

Blockchain Nodes

Another vital part of blockchain technology is its node system. For instance, nodes are responsible for validating each batch of transactions. A node in the world of cryptocurrency refers to a computer connected to the world of cryptocurrency. This machine facilitates several functions, including creating, sending, and receiving information on the blockchain network.

Thanks to blockchain nodes, no organization can own the blockchain technology. Also, no one can compromise its integrity and privacy through any unsystematic or systematic informational exchange.

What Is Bitcoin?

Bitcoin was the first cryptocurrency to appear on blockchain technology in 2009. Its developer(s) goes by the name of Satoshi Nakamoto, a pseudonym that no one has deciphered even today. This person or group published Bitcoin: A peer-to-peer electronic cash system on a small internet forum. The document details blockchain technology and Bitcoin as alternatives to a decaying traditional financial system.

According to Nakamoto, governments and banks had too much control of the financial industry. This means that they can manipulate it for their own interests. Instead, he visualized a new kind of currency that these central authorities could not control or dictate.

At first, many people did not believe that such a currency could exist. But, with time, more and more people started to buy Bitcoin. Furthermore, the more the banks and other traditional financial institutions opposed this currency, the more popular it became.

Bitcoin is a peer-to-peer payment system that runs on blockchain technology, which is decentralized in nature. In turn, this virtual currency provides low transaction fees and more secure transactions than other traditional and popular payment methods.

How Does Bitcoin Work?

If you want to mine or invest in bitcoin, you must first have a Bitcoin wallet. The next step is to find software to receive, send, and store funds more securely. The software is downloadable on any PC, smartphone, or other portable device. Currently, more than 10,000 nodes use the Proof of Work system to mine bitcoins and verify transactions.

Bitcoin mining involves the use of special computers, ASICs. In turn, industry-leading companies invest in such mining technology, employ Bitcoin miners, and profit from it. Nevertheless, individual miners can still take part in Bitcoin mining. Unfortunately, it is more expensive to earn a considerable profit due to the highly volatile crypto market.

Today, large corporations control and own massive bitcoin mining pools. This means that Bitcoin’s mining power is slowly reaching centralization. In turn, this evolution is undermining the original Bitcoin blueprint.

Since Bitcoin is a virtual currency, it goes without saying that it does not have a physical form. Instead, it uses a unique mathematical algorithm that secures a string of numbers stored in a private and public key.

Simply put, the private key is similar to an ATM pin, while public keys refer to a bank account number. Lastly, Bitcoin is divisible to eight decimal places, with the smallest unit being the Satoshi.

What Are the Significant Differences between Blockchain and Bitcoin?

As we mentioned earlier, many people confuse the two terms, ‘blockchain’ and ‘Bitcoin.’ However, the significant differences between these two terms include:

Blockchain is the underlying technology for many cryptocurrencies, including Bitcoin. Its role is to enable anonymous and secure transactions across various digital platforms.

While Bitcoin functions on anonymity, blockchain works using a transparent mechanism.

Bitcoin is only for use as a store of value and as a medium of exchange between virtual currencies. On the other hand, blockchain has more uses, such as transferring digital assets, proprietary information, and rights, among many others.

Lastly, the blockchain aids in executing smart contracts as they automatically release agreements on the platform. Therefore, this technology helps maintain a transparent audit supply chain and records system while offering proof of insurance.


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Blockchain technology and Bitcoin payments will soon experience mainstream adoption. As more and more companies embrace these new concepts, many believe that they will soon replace traditional forms of payment. Lastly, they will change how we perform transactions, making them more secure and easier to use.

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