Is Crypto a Blockchain or are they separate entities?
A lot of people lump the two together.
However, now we’re going to go over 3 areas that will tell us if they should be separated out.
Crypto is short for cryptocurrency and although most cryptocurrencies were created using blockchain technology and are based on it. There is at least one crypto that doesn’t use it; so cryptocurrencies aren't a blockchain and blockchains also have several uses that don’t involve cryptocurrency either.
Crypto is the abbreviated form of the word cryptocurrency.
Now a cryptocurrency is an encrypted virtual or digital currency.
Most of them are created using cryptography and blockchain technology.
Crypto’s are also decentralized.
So, what that means to you is that they are outside of the government or central bank’s control.
Now, what that means to me is that I’m going to hold them (bitcoin) for the long term as a hedge against inflation and as a store of wealth.
Also, bitcoin, the first fully developed cryptocurrency was created by the mysterious Satoshi Nakamoto.
Now, in Nakamoto’s white paper “Bitcoin: A Peer-to-Peer Electronic Cash System.” which was the first introduction to bitcoin, by the way, it was stated that bitcoin would be “an electronic payment system based on cryptographic proof instead of trust.”
The cryptography used for proof that Nakamoto was talking about is called proof of work when it comes to cryptocurrencies like bitcoin.
So, proof of work is where miners using computers verify multiple transactions using complex mathematics in return for a reward (which in bitcoins case this reward is a set amount of bitcoin).
These transactions are called blocks.
After being verified these blocks are added to the blockchain, which is basically a digital public ledger.
Also, bitcoin and other cryptocurrencies have always had volatility when it comes to their price and last year in 2021 bitcoin’s lowest price was below $30,000, while its high was well above $60,000.
Another thing, you can also use crypto to purchase various products and services.
Although, as a form of currency, specifically when it comes to buying things, cryptocurrencies are still in their infancy stage, meaning they’re not widely accepted by merchants as of now.
One reason is what I just wrote about their current volatility.
Since merchants can’t count on a reasonably stable price from one day to the next.
In saying that, there are also some people who think cryptos will never really be fully used as a currency in the classic sense of the word, but instead as a store of wealth or because of blockchain technology as utility or asset tokens.
Blockchain is a digital ledger that is immutable (the values in it can’t be changed) and it is distributed among thousands of nodes (computers) around the world.
The blockchain can be used to record transactions (like cryptocurrency purchases) as well as track assets.
These assets can be tangible (physical, like real estate) or intangible (non-physical, like trademarks or other intellectual property).
The data or information from the transactions is grouped in blocks.
Then those blocks are connected together using complex math derived from cryptography.
They are also linked together like a regular chain, where the block before it is linked to the one behind it.
Hence, where we get the word blockchain.
Also, the blocks validate the specific time and the order in which the transactions are done too.
Every new block that is added brings an added layer of protection to the verification of the block before it.
Another thing, since the blockchain is shared with nodes or computers all over the world, with every transaction there is computer software that is used to bring every transcription of the blockchain the new data at the same time.
This ensures that all the info on the blockchain (digital public ledger) will be identical and precise.
Now to start with, most cryptocurrencies use and are based on blockchain technology.
However, there’s definitely at least one cryptocurrency that doesn’t use blockchain.
Around 2015 a project called IOTA was announced.
Now even though IOTA can be used like other cryptocurrencies, it was created to be used for the Internet of Things (IoT).
Also, it is a crypto that doesn’t use a blockchain.
It works with what is referred to as tangle.
Now, tangle uses a mathematical concept known as a directed acyclic graph.
So instead of using miners and nodes to validate transactions, IOTA uses self-validation thru tangle technology.
Now what this means in its basic sense is that if you want to do a transaction using IOTA’s tangle, then you have to confirm two pre-existing transactions prior to sending your own.
Also, one advantage tangle is said to have over the blockchain is that it’s faster.
Although, on the other hand, one drawback tangle has when compared to the blockchain is its past security issues and how secure it will be going forward.
Still, as far as the future of crypto goes, tangle technology is something to keep your eye on.
Now to finish up with the IOTA foundation, I think their main goal is to make advancements in the field of IoT (Internet of Things) using their IOTA tangle technology.
So one of the main reasons that Satoshi Nakamoto invented the blockchain was to prevent the problem of double-spending when it came to digital currencies.
However, it’s presently being applied to several different areas and a lot of people think that’s just the tip of the iceberg.
Since the blockchain is basically a computer code and can be programmed for all sorts of things.
Now, here are a few of the areas that blockchain technology is being used for right now, other than cryptocurrencies.
The first thing I’m going to mention is Medical Records.
There are smart contracts being used to create secure systems in order to store all your private healthcare information.
With this, your health info would also be able to be shared between healthcare providers pretty seamlessly while staying secure.
Supply chains are another place where companies are beginning to make inroads when it comes to blockchain technology.
Also, Just think how important your Birth Certificate and Social Security Card are.
So, your identification records are another area that the blockchain’s starting to make a positive impact. Finally, we come to Legal Documents.
They also contain private and sensitive information most of the time and we want to make sure to keep them secure as well.
That way, for example, nobody gets a hold of our personal and home loan info and then refinances our house.
Which would allow them to steal money, possibly ruin our credit, and potentially leave us with a larger mortgage and higher note.
So, let’s take that back, so we’re not putting that out in the universe!
Video Version: Is Crypto A Blockchain? Discover The Difference!
Cryptos are digital currencies and most of them were created using blockchain technology. They’re decentralized too, so they’re not under any government or central banks control. You can also use them to buy some products and services, although they’re not yet mainstream. Another thing we found out is that there is at least one crypto that doesn’t use the blockchain. However, there have been some security issues with the tangle technology that it uses instead of a blockchain. Now when it comes to the blockchain, it is an unchangeable digital ledger that is distributed to thousands of computers around the world. It’s used to record transactions like the buying and selling of cryptos and track assets. These assets can be non-physical like Trademarks or physical like real estate. These transactions are grouped together in blocks and then strung together securely on the blockchain. So even though most cryptos use a blockchain, they are not the same thing. Also, as far as the blockchain goes, since cryptocurrencies are different from the blockchain, the same holds true the other way around. Meaning the blockchain is not synonymous with crypto. Finally, blockchain technology certainly has a few uses right now that don’t involve crypto and there will probably be a lot more coming down the pike.