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Cryptocurrency and Blockchain Basics: How does it work?

The cryptocurrency and blockchain industry has been blooming for the past decade. In a single day of January 2023 around 291015 to 205314 Bitcoin transactions were carried out. That sounds insane, right? Millennial consumers are finding digitalized and decentralized mediums as the modern way of keeping assets.
You may have heard blockchain and cryptocurrency terms used interchangeably. However, blockchain and cryptocurrency are two completely different phenomena. These two technologies are used together to create a secure and fast transaction system for people.
If you are confused about what these terms mean and how they work, you have landed at the right place. In this guide, we will cover all the basics about blockchain and cryptocurrency for you.
So, let’s begin with it.

What is the difference between cryptocurrency and blockchain?

You must be wondering if blockchain and cryptocurrency are the two same things. Well no! Here is how they are entirely different from each other;

  • Cryptocurrency: Cryptocurrency is a digital currency that has market value like other physical currencies such as etc. The only difference between cryptocurrency and other currencies is that crypto is a digitalized asset.
    It is an independent and decentralized form of money that does not require banks and governmental verification for transactions. Nearly 80% of central banks worldwide are considering launching their own cryptocurrency to encourage the digital transaction system.
    Cryptocurrency is stored in digital wallets, and you can transfer funds to anyone anywhere in the world without bank verifications or high fees.
  • Types of cryptocurrencies: Although there are thousands of types of cryptocurrencies currently introduced in the market. But some of the best-known cryptocurrencies are as follows;
    Bitcoin: Bitcoin was the first cryptocurrency and still is the best-known and most traded digital currency in the world. Around 200 to 220 bitcoin transactions were carried out every minute in 2023
    Ethereum: Ethereum is another popular cryptocurrency that is swiftly emerging with a high investment rate.
    Ripple is not just a currency; it is a fully distributed ledger system which helps you transfer and track funds.
    Litecoin: Another widely invested cryptocurrency is litecoin. The market valuation of the coin is rapidly increasing since 2022.
  • Blockchain: Blockchain is a chain of distributed databases that store large amounts of transaction information in blocks. These blocks are distributed among various systems' distributed ledgers. Once the storage of one block is filled, it is chained with another block. The blocks are linked with each other via cryptography.
    The blockchain database is a permanent ledger with structured information. It is not a currency; it is a digital system launched to record and distribute information without any malfunction. The information stored in the blockchain ledger can never be changed, deleted, or corrupted as per convenience. That’s why it is known as the most secure and non-tangible transaction system.
    Since the blockchain system is transparent, it allows users to view and track all transaction information without fail.

Conclusion

Cryptocurrencies are operated on blockchain digital systems to provide secure and encrypted transaction methods to the users. However, crypto is a form of digital currency, while blockchain is a distributed ledger system that carries transactions.
So, if you want to invest in a high-selling cryptocurrency, you are just a click away.