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The Differences Between Blockchain and Cryptocurrency

Did you know the presence of cryptocurrency in the investment world? These days, more and more people have an interest in crypto trading since they can make money. You can sell your cryptocurrencies at the right time, where you can get profit or return. Those who want to step to this investment type must be familiar with the differences between blockchain and cryptocurrency.

Just like starting any other investment type, starting crypto investment means you must be familiar with as many related terms as possible. Some people out there still ask what crypto is and how it is different from the blockchain.

In simple words, blockchain is the technology while cryptocurrency was the first successful application running with the use of that technology through Bitcoin in 2009.

The first important thing to do to understand the difference between blockchain and crypto is to know the definition and how they work.

What Is Blockchain?

Generally speaking, blockchain can be defined as a recording transaction system in multiple databases that are widely spread across many computers, where each of them contains the same records.

The Differences Between Blockchain and Cryptocurrency
Image from Pexels – Olya Kobruseva

It means that the transaction record that occurs in this system is centralized because all computers get connected to the database system without a central location. So, blockchain systems will minimize the possibility of unilateral hacking and database changes.

The transaction records are stored in interconnected blocks. A new block will be created by staying connected to the previous block if one block is full. The record of transactions that are loaded into a block can’t be changed again. This blockchain property is called immutable.

Many people think the blockchain system is a new technology. It has been in the industry since 1991. It gained popularity after the presence of cryptocurrency. To be able to understand blockchain technology, learn more about the block, miner, and node.

Block

These blocks are the core of Blockchain technology; each chain is made up of blocks. Each block contains all the records related to a transaction. Each block contains unique nonce and hash, which are then stored at the end of the blockchain with linear and chronological placement. With more chains available, nobody can manipulate or disrupt the chains easily.

Miner

Miner is a term used for individuals who can produce blocks. This task is complicated due to the complex composition of the blockchain environment.

Node

Node is an individual computer that becomes part of a blockchain system. The computers have the same degree, so there is no single center Node or computer.

It is also known as a peer-to-peer network that blockchains offer. Fortunately, you are still able to use other peers when some peers get disturbed since there is no central authority.

What Is Cryptocurrency?

Perhaps, you already find out various meanings and definitions of crypto. If you can’t simply get the point, then you can call crypto as the implementation of blockchain technology in the form of digital currency. You can use it for any peer-to-peer transaction.

The Differences Between Blockchain and Cryptocurrency
Image from Pexels – Karolina Grabowska

The emergence of crypto began with the discovery of Bitcoin by an anonymous with the nickname Satoshi Nakamoto. Through a decentralized network, Cryptocurrencies offer cheaper and reasonable transaction fees than conventional payment or money systems.

You must also know that bitcoin is not the only virtual currency. When it comes to cryptocurrencies, you can consider Ethereum, Ripple, Litecoin, Nubits, Paycoin, and Dogecoin. Since it all utilizes a blockchain system and are known as digital currency, you can also use it for any transaction as well as bitcoin.

Unlike conventional currency, you can’t store it physically. It uses a complex mathematical algorithm to protect the numbers with a private key or password.

The user’s behavior strongly influences the value of a digital currency. Both the increase and the decrease can be very volatile. It can rise significantly in a short time and vice versa.

The Different Regulation in Indonesia

The regulation in Indonesia makes blockchain stands different from cryptocurrency. Reporting from the official website of the Minister of Communication and Information (Menkominfo), Indonesia stated that it was against the existence of Bitcoin and other cryptocurrencies. However, blockchain technology is accepted in the country.

We can’t avoid blockchain so that Indonesia supports this technology. Aside from that, blockchain implementation can support transparency. Blockchain is applicable in banking to track the movement of money from one to another bank easily. While crypto is considered coming with unclear originality. It is impossible to know its owner and how it comes from.

Previously, the Chief Executive Director of the Payment System Policy Department, Eni Panggabean also said that the use of Bitcoin and other cryptocurrencies violates Law Number 11 of 2017. The law states that Rupiah is the legal currency, so we can use crypto for any transaction in Indonesia.

Meanwhile, it is reported that five major Indonesian banks like Mandiri, BRI, BNI, Danamon, and Permata are preparing to implement Blockchain technology. They cooperate with IBM, a giant technology company from the United States.

President Director of IBM Indonesia, Gunawan Susanto, said that the benefit of implementing Blockchain technology for the banking industry is to accelerate cross-border money transfer transactions.

By implementing blockchain technology, the transaction can be done only within 15 seconds. However, IBM will not work independently. It will always report to Otoritas Jasa Keuangan or OJK to ensure that this technology will be always on legal track by the law and regulation in Indonesia.

Blockchain Vs. Cryptocurrency: The Differences

Any cryptocurrency uses blockchain technology for secure transactions. It means that blockchain and crypto are different things.

Let’s take a look at Google and Internet as the sample. You can’t benefit from Google without the Internet. On contrary, the internet still runs even without Google’s presence since there are still many other search engines. In the same case, crypto needs a blockchain system while blockchain can run well even without crypto. Did you now get the difference between blockchain and cryptocurrency?

Now, you can consider crypto for investment. What to keep in mind is you can trade it at a trusted platform, not for transactions in Indonesia. If you want to try doing the transaction with crypto, find out stores all around the world that accepts it as the payment option. So, be wise before making the decision related to cryptocurrency uses.

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