Many people are making a huge amount of money through cryptocurrencies nowadays. However, there has been extensive debate regarding the use of cryptocurrencies for money making. That debate is majorly based on two essential terms, ‘bitcoin’ and ‘blockchain.’ The surprising part is that despite the ongoing debates and the fact that a lot of people are making money out of it, they’re still confused between the two.
It is pertinent to mention here that Blockchain is the technology while bitcoin is the first successful application of that technology, which rose to popularity in 2009. This article would categorically differentiate between the two and explain their use in the world of cryptocurrencies.
To begin, we need to understand each term with a contextual background.
What Is Blockchain?
Blockchain is a computerized digital payment gateway that allows record transactions between two parties constantly and correctly. To further simplify, blockchain is a distributed ledger technology, which restricts to bitcoin; in fact, any digital asset. It enables multiple parties to transact, share valuable data, and pool in their resources in a secure yet tamperproof manner.
Many in and out of the industry assume that blockchain is the latest technology. However, that is not the case, blockchain can be traced back to 1991, but it only became popular after the advent of cryptocurrencies.
Here is why blockchain may be difficult to understand or perhaps regulate. Blockchain is decentralized, made up of three important concepts, blocks, miners, and nodes.
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Each chain comprises Blocks, which is central to blockchain technology. They contain all the relevant information about a transaction. Each block has a unique nonce and hash and is stored not only linearly; in fact, chronologically, always at the end of the blockchain. As the chain increases, it is tough to go back and manipulate or disrupt the chain.
Miners are the ones that create multiple blocks, which is an incredibly complex task considering the composition of a neighborhood.
Nodes are significant in understanding the decentralization system within the blockchain. Through nodes, no one organization can own the blockchain, which helps blockchain to maintain integrity and prevent a breach of privacy through any systematic or unsystematic exchange of information.
What Is Bitcoin?
Bitcoin is one of the earliest cryptocurrency to use blockchain technology in facilitating peer to peer payments. Through a decentralized network, bitcoin offers a reasonably low transaction fee compared to popular payment gateways.
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The first and foremost thing is to get a bitcoin wallet, software to send, receive, and securely store funds. You can download it on your phone, PC, or any equivalent digital device for that matter. The second part is to earn bitcoins through trading, to play online games like Bitcoin blackjack, or requesting bitcoin payments from a client. Bitcoin is not like any other currency governed under a central banking system.
Bitcoins are not stored physically on any platform, and it uses a mathematical algorithm to protect a string of numbers stored in public and a private key. In layman terms, the public key is equivalent to a bank account number, while a private key is equivalent to an ATM pin. A bitcoin is divisible to 8 decimal places with the smallest unit known as satoshi named after the currency`s pseudo founder Satoshi Nakamoto.
Anyone Can Send Or Receive Bitcoins
As complex as it sounds, bitcoin is not a problematic currency to understand. It is far more convenient to pay or get paid. All one has to do is to create a bitcoin wallet and put the address into any digital currency platform.
If you’ve recently found the world of cryptocurrencies, it is perhaps understandable to mix up bitcoin and blockchain, but there are some significant differences between the two.
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- Blockchain is a technology and many cryptocurrencies like bitcoin using blockchain for secure and anonymous transactions.
- Blockchain is a transparent mechanism, whereas bitcoins operate on anonymity.
- Blockchain has a much more extensive use, while bitcoin is only restricted to exchange in digital currencies.
- Bitcoin is only used to transfer digital currencies, while blockchain transfers proprietary information, digital assets, rights, etc.
If you’re someone who uses online payment gateways to send, receive, or store currency, you need to understand the relation between bitcoin and blockchain. However, blockchain has several uses other than regulating bitcoins.
Blockchain can help execute smart contracts; blockchain can automatically release agreed-upon payments. It can help you maintain a transparent system of record, audit supply chains, or provide you with proof of insurance.
Why Is Blockchain Important For Gamblers?
Now that you are pretty clear between blockchain and bitcoin, there is one industry that has lately adopted blockchain technology: the online gambling industry. Developers use blockchain technology to develop games on a decentralized ledger. No matter what, you’re playing from lotteries to online poker, slots, or perhaps sports betting. Blockchain enables a data-driven yet the secure dispensable system for gamblers to pursue trustworthy transactions through bitcoin over traditional banking payment gateways.
Now here is the thing with crypto gambling, in regular online gambling, you register, enter your bank details, the merchant verifies, and the process goes on. With bitcoin, you can start betting, and the merchant knows that your payment is not going anywhere.
The Future Of Blockchain And Bitcoin
Blockchain continues to dominate our internet spaces. It is perhaps essential to exercise caution when dealing with cryptocurrencies. For example, if you are pursuing crypto gambling, make sure you use trustworthy service providers. Often online casino websites use third-party service providers to convert you bitcoin deposits into local digital currency.
Bitcoin and blockchain technology remains mostly under or unregulated throughout the world due to innate complex structures. Therefore be careful while using bitcoins in any online transaction.
On a positive note, despite the intricacies, both offline and online casinos worldwide are adopting blockchain technology and accepting bitcoin payments. Soon this technology will take over traditional payment gateways such as Visa and PayPal. More importantly, it can change the way we process payments for casinos; making them safer and easier.
First Published at The Difference Between Blockchain and Bitcoin – UKTN