Difference Between Bitcoin and Blockchain
In Blockchain every block contains a cryptographic hash of the previous block, a timestamp, and transaction information. In other words, blockchain is a distributed database technology, which restricts bitcoin. In fact, any digital asset. It enables multiple parties to transact, share valuable data, and pool their resources in a secure yet tamper-proof manner. Data contained within the blockchain is distributed across many computers and is therefore decentralized. Due to decentralized nature blockchains are incredibly secure as there is no single point of attack.
The Bitcoin Network is the network of computers throughout the world that are connected together, to actually process Bitcoin payment transactions between Bitcoin accounts. These computers are referred to as miners and are owned by individual people and companies around the world.
The Bitcoin Network is very secure. There is no possibility of ‘Double Spending’ and the system has been specifically designed and coded to make creating counterfeit Bitcoin or fake transactions impossible.
Bitcoin is one of the earliest cryptocurrencies 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.
|S.No.||Basis of Comparison||Blockchain||Bitcoin|
|1.||What is it?||A Distributed Database||A cryptocurrency|
|2.||Main Aim||To provide a low cost, safe and secure environment for peer to peer transactions||To simplify and increase the speed of transactions without much of government restrictions.|
|3.||Trade||Blockchain can easily transfer anything from currencies to property rights of the stock||Bitcoin is limited to trading as a currency.|
|4.||Scope||It is more open to changes and hence has the backing of many top companies.||The scope of bitcoin is limited.|
|5.||Strategy||Blockchain can be adapted to any changes and hence it can cater to different industries.||Bitcoin focuses on lowering the cost of influencers and reducing the time of transactions but is less flexible.|
|6.||Status||As blockchain works with various businesses, it should have compliance with KYC and other norms. Hence blockchain is transparent.||Bitcoin likes to be anonymous and hence even though we can see the transactions in the ledger, they are numbers that are not in a particular sequence.|
I’ve found that the best way to explain the security of the BlockChain and Bitcoin Network is to compare some of the points of Bitcoin with a more familiar setting, such as a bank.
Bitcoin adheres to very strict rules through its coding. For the purpose of this comparison, we are applying the same rules to the banking system to allow for a fair comparison.
|Bitcoin System (BlockChain & Bitcoin Network)||Bank System|
|There is only one Bitcoin BlockChain.||There is only one bank in the world.|
|The Bitcoin system knows exactly how many Bitcoins exist in the world.||Bank knows exactly how much money exists in the world.|
|Knows where all Bitcoin came from and when it was created.||Knows where all money came from and when it was created.|
|Knows every transaction ever made between accounts.||Knows every transaction ever made between accounts.|
|The ledger showing all transactions ever made is publicly viewable.||The ledger showing all transactions ever made is publicly viewable|
|Knows exactly how much Bitcoin is in each account.||Knows exactly how much money is in each account.|
The above points are factually true for Bitcoin, they are hard-coded, cannot change, and cannot be interpreted in any other way than they are written. These points are obviously not true for our current banking systems but for the purpose of this comparison, we are applying these rules to the banking system.
As well as the above points, the BlockChain and Bitcoin Network must process the transaction list in full every time transactions are made and more than 50% of the network must agree that the transactions are the same.
Each miner in the network has their own copy of the ledger which shows every transaction ever made from the very first Block to the present day.
Every transaction in the ledger from the very start to the present day is checked and confirmed by the miners each time a new block is processed.
In order to insert a ‘counterfeit’ transaction into the BlockChain or Bitcoin Network the counterfeit transaction would have to be put into over half of the miners-ledgers throughout the world at precisely the exact same time and because of the sheer size of the Bitcoin Network no one has that much computer processing power and it would cost too much money to “hack” the network.