Are bitcoin and blockchain the same thing? Most people are confused between bitcoin and blockchain, and some even think of both as the same thing, but the answer to this question is no. The bitcoin and blockchain aren’t the same, but they are related. Bitcoin was released in 2008, and it is an open-source code, and the blockchain is appropriately wrapped in it, providing the same solution. Additionally, bitcoin is the first application or click here to start trading based on blockchain; therefore, people get confused between the two. This is where misunderstanding begins, but bitcoin is a currency, whereas blockchain is the technology on which bitcoin is based, and there are many other uses of blockchain.
Blockchain has been highly used in businesses and companies because it provides some unique and ultimate solutions for flaws of traditional payment systems or banks. Many industries benefit from blockchain, and here in this article, we’ll see the difference between bitcoin and blockchain used for businesses. But before that, let us first understand how bitcoin is different from blockchain?
How is bitcoin different from blockchain?
Bitcoin is a digital currency that is unregulated and was developed in 2008 by Satoshi Nakamoto and was released in 2009. It is a cryptocurrency that was designed to replace traditional currencies that the government regulates. Bitcoin is a form of payment between peer-to-peer by eliminating the need to involve government or banks. This means that no third party is involved in the processing of payments. Bitcoin allows payments, but after eliminating government, there was a need for a system or something that can help secure transactions.
This led to the development of blockchain to store or record bitcoin transactions. All the bitcoin transactions are recorded in a distributed public ledger on a network that is a peer-to-peer network and works anonymously. Blockchain is the underlying technology of bitcoin that records transactions and makes the entire bitcoin network secure.
How does blockchain work for businesses?
Bitcoin was the first and only application of blockchain, and that blockchain was specifically developed for cryptocurrencies. Because people weren’t aware of other uses of blockchain and they thought it could only be used in bitcoin, which caused a delay for people in accepting blockchain for other areas. Before using blockchain in other businesses and different sectors, it was required to be modified to meet the standards of different businesses. There are multiple features of blockchain for businesses that make it different from bitcoin’s blockchain.
Identity verification over user anonymity
Bitcoin flourished because of the user anonymity that it provides. Bitcoin’s blockchain ledger is completely transparent as it allows everyone to view the ledger anytime and maintains anonymity. The ledger is transparent, but all the accounts or transactions have a meaningless and different sequence of numbers. If we talk about businesses, they have to follow all the norms of KYC and AML policies, making it completely transparent with whom the business is dealing. It needs to be transparent for clients but doesn’t make everyone view all the business transactions.
Assets over digital currencies
People thought that blockchain only works with bitcoin, but in reality, there are many assets that it can work with or used for and are not limited to only cryptocurrencies. Blockchain is highly used in businesses to keep the right record of customers and clients, minimize fraud, and avoid the issue of double financing and tampering of documents.
Selective endorsement instead of proof of work consensus method
Bitcoin’s blockchain works on the proof of work consensus method, but the consensus method in blockchain for businesses is different. Consensus in blockchain, particularly for businesses, isn’t accomplished via the mining process but is accomplished through the “selective endorsement” process. It is the process where it provides control about verifying transactions. Third-party does the verification, and it is a completely different method from that bitcoin follows.
By the features that blockchain provides for businesses, it can be observed that it is changing the way of conducting business and is helpful for every business to grow.