The terms blockchain and cryptocurrencies often tend to be confused with each other but they are completely different. Cryptocurrencies are virtual currencies that run on blockchain technology, which works as a digital ledger for enabling and storing transaction records. Even though blockchain became more conspicuous with the advent and increased adoption of cryptocurrencies since a couple of years, the technology finds utility in several domains. We discuss the differences and similarities between cryptocurrencies and blockchain technology based on their structure and utility in this article.

What are the characteristic traits of blockchain technology and cryptocurrencies?

• Blockchain forms the basis of cryptocurrencies. It is a technology that behaves as a distributed digital ledger as it stores data in digital format that is shared among the various nodes in a computer network.
• It records all the crypto transactions and stores humongous amounts of data in small clusters or groups called blocks.
• When blocks are filled, they close and get linked to the previous block forming a chain of data known as blockchain.
• Coming to cryptocurrencies, they are like digital money that can be used either as a store of value or to buy goods and servirces.

Here’s looking at the similarities between the cryptocurrencies and blockchain

• Both are intangible, whether it’s cryptocurrency, that cannot be seen like fiat money but holds value and can be traded and exchanged, or blockchain technology which stores and records transactions but does not exist physically.
• Both cryptocurrencies and blockchain technology have heralded the beginning of what could be called digital advancement and signify the highest forms of technological development made so far in the financial market.
• Blockchain can work independent of cryptocurrencies too, but they were developed originally for recording transactions of Bitcoin in 2009. That’s why most of the cryptocurrencies are today invariably based on blockchain like Ethereum or their native ones.

Let’s talk about the main differences between cryptocurrencies and blockchain :

• Blockchain is inherently the technology that enables automatic recording of transactions and storage of cryptocurrency data. On the other hand, the digital currencies could serve as a medium of exchange and for investing and trading to earn profits.
• Cryptocurrencies have a certain value for which they are bought, sold and traded while blockchain does not have any monetary worth.
• Blockchain technology is used in many other fields like logistics and supply chain, healthcare and banking for its many benefits like recording transactions and storing data with utmost security and without middlemen.
• Cryptocurrencies are mainly meant for investments and purchasing things.
• Blockchain is inherently decentralized and spread across databases in the world and not stored in a single place or data center. On the other hand, cryptocurrencies can be dealt with for trading and exchanging money through mobile or desktop wallets from anywhere.

Last but not the least, blockchain offers transparency as every transaction on the blockchain can be viewed publicly by all the miners or users. But even then, crypto transactions are considered secure, because cryptocurrencies do not reveal the true owner of the crypto and makes it anonymous although the source of the transaction can be seen.

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Source : https://timesofindia.indiatimes.com/business/cryptocurrency/blockchain/what-is-the-difference-between-blockchain-and-cryptocurrencies/articleshow/89180651.cms