With Satoshi Nakamoto whitepaper publishing in 2008, the concept of blockchain emerged as the underlying technology for Bitcoin, the world's first decentralized cryptocurrency. Ever since its inception, the two entities have remained inextricably linked, with Bitcoin skyrocketing in value and popularity and blockchain rising in both hype and enterprise viability. Despite the inherent link between the two, Bitcoin and blockchain cannot be used interchangeably as terms, and have drifted in different directions, both in terms of connotation and definition.
Defining Bitcoin and Blockchain
Bitcoin is the best-known cryptocurrency, with over 4,000 altcoins (alternative cryptocurrencies) in circulation after only slightly more than a decade after its inception. Its main advantage is that it's not operated by any central bank or single administrator. As a result, Bitcoin is used to facilitate peer-to-peer transactions on its network without the need for intermediaries.
Its aim is to speed up cross-border transactions, to reduce the centralization over these transactions that governments across the world impose, as well as to simplify the process of sending and receiving payments, regardless of where the parties involved in the transaction are. On the other hand, blockchain is a type of distributed ledger technology This technology underpins Bitcoin by recording transactions between two parties in a verifiable, efficient, and permanent way.
While blockchain technology did become famous through cryptocurrencies, its use case is much wider than that. Blockchain can be simply defined as a ledger onto which we can store various data.
While Bitcoin uses it for simply storing and verifying transaction information, it can also perform other things, such as (just a few prominent examples): Execute smart contracts, Audit supply chains, Provide proof of insurance, etc. Similar to how the internet has changed the world by providing greater access to information, blockchain is poised to change the business world by offering a network where trust is not a problem, and everything is set in stone. While participants in a business transaction might not be able to trust each other, they can trust the blockchain network.
The benefits of blockchain for business are numerous, and for all the ways blockchain is currently being used in business, there are as many, and if not more, undiscovered ways blockchain can be used.
From a technology that made the existence of Bitcoin and other cryptocurrencies possible to a technology that is poised to revolutionize all industries and government processes, blockchain has certainly come along way over the past decade. Its full potential is yet to be understood, just as with all revolutionary innovation.
Bitcoin, on the other hand, is the first and best-known cryptocurrency that uses blockchain technology (among other technologies) to revolutionize the finance sector.
While the misinterpretation of the two by the public may remain for a short while there is no doubt that both are here with one goal in mind: to make people's lives easier.