Are you new to cryptocurrency and wondering what’s the connection between Bitcoin and Blockchain? Here is a detailed explanation.
Most people wonder about the relationship between Bitcoin and Blockchain, especially those new to the concept. It is essential to distinguish between the two and understand how cryptocurrencies and digital currencies operate. Primarily, blockchain is the technology that facilitates cryptocurrency existence. On the other hand, Bitcoin is the digital currency that plays the role of a medium of exchange.
In other words, Bitcoin works like a traditional currency. However, it’s only digital and not physical. Bitcoin was first launched in 2009 by Satoshi Nakamoto, after which it advanced in value and popularity. Today, Bitcoin’s value ranks high in economic importance and prominence above other cryptocurrencies.
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The Blockchain Technology
Fundamentally, blockchain is a decentralized ledger system that operates under a peer-to-peer mechanism. In other words, blockchain exists in a peer-to-peer network where individuals can interact and exchange payments using altcoins such as Bitcoin. Also, it’s vital to note that the decentralization concept means no intermediaries or regulatory bodies are involved in confirming transactions. The mechanism features on the cloud, where transactions happen on blocks between one peer to another. Aside from transaction facilitation, blockchain also allows the effective execution of other activities, such as settling trades and voting.
In a nutshell, a blockchain is a distributed database programmed to maintain the continuously growing records as ordered, which in this case is known as ‘blocks.’ Successful Bitcoin mining leads to new blocks on the blockchain, hence the continuously growing database. A blockchain is decentralized, distributed, and a public ledger necessary for processing and completing transactions within a network of computers.
The Bitcoin Concept
Bitcoin is a digital currency generated through cryptography or solving complex mathematical problems. In other words, Bitcoin is generated through mining and initiating, facilitating, and completing transactions. Notably, Bitcoin works like a traditional currency, only that Bitcoin exists in a virtual form.
The foundational idea in developing and implementing the Bitcoin concept was eliminating central authorities and regulators. In essence, Bitcoin supports peer-to-peer transactions, which means individuals can prompt direct transactions with each other. To facilitate peer-to-peer transactions, Bitcoin requires Blockchain technology, which creates a network of blocks between different computers.
What Maintains Blockchain?
It is important to note that nodes run the Bitcoin software. In return, the Bitcoin software maintains the blockchain. In this case, a chain of blocks is involved, containing the cryptographic hash of the previous block. In other words, the blocks in blockchain technology have an interconnection that creates a network accessible from different computers. The first block marks the genesis of the network, through which other hashes form. The eventuality is a vast network whose basis is how often and how many bitcoins miners generate and incorporate into the ledger.
Final Word
Since its launch, Bitcoin developers have constantly worked towards enhancing its infrastructure for easy and effective transaction completion. On the other hand, the blockchain technology in which Bitcoin exists features elements that allow the expansion of decentralized technology. Extended Bitcoin mining culminates in the growth of the Blockchain network. Each node is a representation of hashes that resonate with the network genesis. The more mining, the more bitcoin is introduced to the blockchain. Blockchain maintenance is necessary to ensure the network upholds safety while performing efficiently.