What is Blockchain?
We usually hear the word cryptocurrency and the word BLOCKCHAIN. Are they the same? What EXACTLY is BLOCKCHAIN?
It is fundamental to understand what is blockchain for anyone interested in cryptocurrency. Reason being that most cryptocurrencies use blockchain to record transactions. However, don't get mixed up, Cryptocurrency are powered by block chain technology but they are NOT the same thing. Blockchain has found many uses beyond cryptocurrency.
A blockchain consists of a number of blocks, hence the term. Each block is a record of transactions of specific data, which can contain anything from Cryptos to voting records to medical data. When one block is completed and can no longer be updated with new data, it is added to the chain and another new block, is formed.
All the information on the blockchain is publicly available, as it’s a decentralized system. Decentralized literally means that the information is stored on many computers distributed around the globe, and there’s no specific party or authority to control it.
Both financial and non-financial Institutions envisage this new BLOCKCHAIN technology to become the NEW ENGINE of growth in digital economy where we are increasingly using internet to conduct commerce and share our personal data and life events. This can be used in EVERY aspect including health records, legal documents, marriage licenses etc. (the list is very loooong). Companies and institutions are aware that by using this new technology they will have a COMPETITIVE advantage over others which have not invested in it.
So how is blockchain related to cryptocurrency?
For most of the cryptocurrency including Bitcoin, Ethereum, Ripple (XRP) etc. blockchain is the technology that enables their existence. The cryptocurrency itself is a medium of exchange (such as EURO) which is CREATED and STORED electronically in the blockchain using encryption techniques to control the creation of the units and to confirm the transfer of the funds.
So BLOCKCHAIN can exist if cryptocurrency become obsolete but most cryptocurrencies CAN'T exist without the blockchain.