For newcomers to cryptocurrency, terminology can be quite confused and even misleading.
Some people refer to bitcoin when they talk about cryptocurrencies, while others will mention the blockchain when they speak of cryptocurrencies in general.
However, these terms are not really interchangeable: they refer to distinct but linked concepts. It is therefore important to understand the differences between these 3 names, and this is what I will try to do in this article.
The blockchain
There blockchain is a distributed registers technology that forms a “block chain“. Each block includes information and data that is grouped together and verified.
The blocks thus validated are integrated following the previous block. These operations blocks are constantly recorded in a large book which constitutes the block chain, or blockchain.
It's exactly as an electronic version of a large paper bookwhich in accounts is responsible for registering a list of transactions. Of course, this large electronic book is decentralized, distributed, and everyone can contribute to it. For example as part of a cryptocurrency: the blockchain being then A (very) long line of encrypted code where each transaction is archived in an encrypted and chronologically stored block.
There blockchain is an interesting technology for many companies because it could be used in many cases. Why not imagine using it for food traceability, for example? Each block would contain one or more stages of making a prepared dish, which raw materials used at what time of the development, where, by whom … and all that to the supermarket.
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Cryptocurrency
A cryptocurrency is a digital form of cash served as means of exchange within a network of users. Unlike traditional banking systems, these transactions are followed and archived in an encrypted and public blockchain, and can be carried out directly between the participants (peer peer network) without having recourse to an intermediary.
The use of a powerful cryptography to secure financial transactions, the control of the creation of additional currencies and the verification of the transfer of assets without intermediary (government, bank, etc.) as well as anonymity have attracted a large number of users and cryptocurrencies have therefore multiplied. The first and most famous is called the Bitcoin.
There are dozens of them, let us quote for example Etherum, Dogecoin, Litecoin, Ripple, Peercoin … Some of these currencies have a monetary mass valued at several billion in US dollar equivalent!
Bitcoin
Bitcoin was introduced in 2009 by developer Satoshi Nakamoto. The idea of the time was to create a electronic payment system Independent and decentralized based on mathematical evidence and cryptography.
Although the best known, Bitcoin is not the only one. There are many other virtual currencieseach with its own characteristics and mechanisms. For example, not all rest on their own blockchain.
Like most cryptocurrencies, Bitcoin has a limited supply, which means that no other bitcoin will be generated by the system once the maximum supply has been reached. The maximum supply of bitcoin is set at 21 million units. Usually, the total offer is public information which is defined at the time of the creation of the currency. You can check the traffic power and the price of Bitcoin on several specialized sites.
This Limit of the number of units is responsible for the inflation that Bitcoin has experienced for a few years. It is an unclear digital currency.
Any cryptocurrency launched as an autonomous digital option to an existing currency is considered to be legal and its value is guaranteed. But Bitcoin does not have such a value since it is a digital form of private money. You would be surprised to learn that Bitcoin has no value basic or underlying assets.
This is why central banks around the world have expressed their concern in the face of the use of these private currencies. In some countries, cryptocurrency is considered a means of financing terrorism and money laundering.
Launch your Crypto project
As you can see, these 3 terms, although linked, are not the same thing at all.
In the same way that all thumbs are fingers, but not all fingers are thumbs, bitcoin is cryptommonaie, but not all cryptocurrencies are bitcoins. The blockchain, in this slightly wobbly analogy, would be the palm of the hand, because all the virtual currencies are attached to it.
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