Blockchain and cryptocurrency are often considered the same, but it’s way different than you think. When the term blockchain is mentioned, the first thing that comes to mind is cryptocurrency.
Cryptocurrencies are a type of money that runs on blockchain technology.
Cryptocurrencies and blockchains work together to create a decentralized, secure, and utterly digital chain of transactions.
There is no office, warehouse where the servers are stored, and other locations where operations are carried out.
Blockchain and cryptocurrency work similarly because cryptocurrencies use blockchain technology to operate.
Blockchain is a decentralized ledger that stores transaction records and cannot be altered. As a result, once a transaction is approved and included in a block, it is permanent. Therefore, it will now always exist on the blockchain.
Blockchain technology is different because it is entirely decentralized, meaning no central authority owns or manages it. Instead, it is for consumers and belongs to them.
A blockchain is data saved in the form of blocks. Each block contains a predetermined number of transactions. The blocks are then linked to form the blockchain. This makes it extremely difficult to hack or modify.
On the other hand, cryptocurrency is made up of two words: crypto and currency. While the definition of currency is obvious: money, crypto means encrypted or written in codes. So, the purpose of a cryptocurrency is to be a digital asset with monetary value.
It is created to foster easy exchange, and that’s where blockchain comes into the picture. All the crypto transactions that take place are recorded using blockchain technology.
Blockchain and cryptocurrency are undoubtedly changing the world in different ways. Let’s see how.
1. Reduce the Risk of Fraud
Fraud is one of the biggest concerns regarding almost anything relating to money. Whether transferring funds or simply using a credit card on an insecure site, the possibility of fraud is a big concern for everyone. This is especially true for those who’ve been the victim of fraud in the past.
2. Change the Money Transfer Process
Wires and bank-to-bank transfers are faster and more efficient. However, they still have a long way to go. It can still take some transfers a week or longer to clear and be deposited – especially if the transfer is international.
The cryptocurrency transfer doesn’t require the same checks and balances processes that banks do before funds can be deposited.
3. Make E-Commerce Stronger
Everyone makes most of their purchases online nowadays, especially during The Holidays. Although it’s much more convenient than driving from store to store to find a specific item and makes window shopping a lot easier and more comfortable, fraud concerns deter shoppers from making certain or as many purchases as they otherwise would.
4. Encourage Scientific Advancements
We’ve made a lot of scientific advancements in the last 100 years alone. Still, critical data and information seem to be kept secret by institutions and governments worldwide, making it difficult for continued collective advancements.
Blockchain and cryptocurrency technology can help change our scientific roadblocks by providing everyone access to real-time data and eliminating the significant institutions, foundations, and corporations sitting on important information.
5. Keep Companies and Individuals Accountable
Unfortunately, there are numerous companies and even entire industries out there that follow corrupt and illegal practices. As consumers, we want to ensure that the businesses we buy from are run with integrity and that all rights are upheld and laws followed.
But unfortunately, taking a company or individual’s word on their innocence based on what they write about themselves on paper is not a reliable way to determine the ethics of their actual practices.
The simple answer is no. The use of a cryptocurrency can only happen on the blockchain that issued it or over any other blockchain that is configured to accept it. More brain work is required to conclude that a cryptocurrency can only exist with a blockchain.
Numerous examples exist where the benefits of blockchain technology are being harnessed without the requirement or implementation of cryptocurrency. Still, crypto cannot work or even live without blockchain technology in performance.
Blockchain allows everyone to see everyone else’s transactions and does not force you to trust a person or entity. Instead, special mathematical functions and codes are implemented to enforce security and reliability.
Each wallet is protected with a cryptographic method that uses a unique and distinct pair of connected keys: a public and a private key. Thus, blockchain maintains the flow of the transaction.
Blockchain and cryptocurrency go hand in hand. They both complement one another and maintain the flow going. Cryptos, however, cannot exist with blockchain, but blockchain can be used everywhere. If you want to see how effective Cryptos work under blockchain, then register to our UFUND platform and start investing.