Bitcoin and Blockchain are not the same things at all.
With the release of bitcoin as an open-source code, Blockchain was wrapped up in the same solution too. Experts at Cryptomaniaks assert that before you think about the best ways to buy bitcoin, it is important that you know all about it and its connection with Blockchain technology.
Bitcoin is an unregulated currency which is also known as cryptocurrency. This was launched with the intention of bypassing the currency controls of the government. It also helped in simplifying online transactions as it got rid of third party payment processing. The transactions of bitcoin are transferred using a distributed ledger on an open public peer-to-peer network.
How does the Bitcoin Blockchain function?
Bitcoin Blockchain is a ledger or a database that comprises the transaction records for Bitcoin. But the process is conducted in an open public peer-to-peer network without a centralized body, hence the participants will need to agree on the transaction validity. The process through which the agreement (consensus) is achieved is known as mining.
When you use Bitcoin, the miners will get engaged in complex computational equations to verify the legitimacy of the transaction. To do a valid transaction on a Blockchain, individuals need to have proof of work that will show that they have achieved consensus.
Blockchain for business
The Blockchain supporting bitcoins was developed to support cryptocurrency. But the Blockchain used for supporting business is quite different from the one that was built to support bitcoin.
- Blockchain can be used for a wide range of assets rather than just cryptocurrency. From tangible assets like a car to the intangible one like bonds, Blockchain can prove to be helpful everywhere. Blockchain is also used for luxury goods to minimize fraud and double financing.
- Bitcoin is all about animality. Looking at the Bitcoin ledger, one can see all the transactions but that is all about meaningless numbers. But coming to business, they need to have KYC and AML compliance requirements, so that they know who they are actually dealing with.
- The consensus in Blockchain for business is achieved by selective endorsement. It will bring to control all those who will be able to verify the transactions. This is different from the Blockchain for bitcoin wherein the whole network has to verify the transaction.
What is the effect of Blockchain on the global economy?
The Blockchain for business indeed is poised to change how people do business by offering trust. It is important to note that, anything that is recorded on a Blockchain cannot be altered. So even if business networks do not have trust in one another, they can trust in the Blockchain. Some benefits of Blockchain for business are reduced hours that were spent on the overall transaction process, decreased cost of both overhead and intermediaries and alleviation of fraud risks.
Thus, it can easily be concluded that bitcoin is very much different from the Blockchain.