Have you ever wondered the difference between blockchain vs cryptocurrency? Whenever people talk about blockchain and bitcoin, they mistakenly think that both are the same. This is because bitcoin is the first-ever used application of blockchain. However, blockchain is being used for more than the functionality of cryptocurrencies and is providing solutions for businesses to improve transactions and data security. Blockchain courses in Australia are growing rapidly to provide education on how this emerging technology can be used to create value amongst enterprises.
WHAT IS BITCOIN AND CRYPTOCURRENCY?
In general, bitcoin is a digital currency that is decentralised meaning it is not a government-issued currency and is not controlled by a centralised authority such as a central bank. Bitcoin is only one type of cryptocurrency but has been recognised to be the primary type of cryptocurrency and also referred to digital gold. There are also Alternative Cryptocurrency Coins (Altcoins), some popular ones you may hear of are Ethereum, Ripple, Litecoin and Polkadot. There are thousands of different cryptocurrencies.
Bitcoin is used as a peer to peer electronic cash system providing increased speed for cross-border transactions while providing complete transparency as all the records are stored on the blockchain. This method simplifies the whole transaction process without needing any third-party intermediaries.
WHAT IS BLOCKCHAIN TECHNOLOGY?
Blockchain is a distributed ledger technology that can be used without cryptocurrency. Blockchain is a type of a ledger that records all kinds of transactions – financial and non-financial – and conducts direct peer-to-peer transactions. This ledger system is open, secure, and easily accessible to all.
Blockchain has the means to disrupt various industries and create value propositions to enterprises globally. While bitcoin is only limited as a currency for trading, blockchain can transfer or transact anything of value from cryptocurrency, property rights of stock, legal contracts, supply chain and much more. Blockchain is known as the Internet of value.
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IN LAYMAN’S TERMS
For more straightforward understanding, let us use a casino as an example. Instead of using hard cash, casinos use chips for money. These chips are used to gamble inside the casino, but they are entirely worthless outside the building. Imagine that the casino chips are cryptocurrency coins, and the casino is the blockchain network that allows all transactions.
As a distributed ledger system, blockchain are made of blocks that house all the transaction bundles. Each transaction is validated through a consensus algorithm that is the proof of the transaction or work. This also involves three parties: the sender, the recipient, and the miner. The senders and recipients are the participants of the transactions. The miners are the people within the network who validate the transactions. When they solve and validate the consensus algorithm of a transaction on a block, they create the next block to verify other transactions that may come in.
THE ECONOMIC INCENTIVE
When blockchain is used the whole process and value of all types of transactions for any business and industry become streamlined, simpler, safer, and secure. The blockchain removes inefficiencies, reduces transaction costs while creating trust within the network. It can also remove roadblocks and red tape when multiple parties transact with each other, transactions can not be faked, forged, changed, altered, or removed for illegal purposes. Even when cryptocurrencies are used for financial transactions, they have only used for that – financial transactions. Thus, the blockchain transactions create stability for the business and its products or services.
BLOCKCHAIN IS NOT ANTI-LAW
Contrary to popular belief fuelled by false images in movies, blockchain technology is not an illegal system used by criminal organisations to hide their money. In fact, criminals will find it hard to hide anything in the blockchain. While it’s true that blockchain is a closed system and likes anonymity, all transactions in the ledger are recorded in numeric codes that are open to everyone with access to it. No transaction can be altered, removed, or changed without everyone knowing about it. Thus, blockchain has the ability to adapt and work with all industries to rules and norms set by governments for businesses, such as the anti-money laundering laws and adequately identifying all persons involved per transaction. Blockchains build up public trust because the whole ledger system clearly shows all transactions, and the public has full access. It is a system that cannot be hacked from within and without.
If you’re interested to learn more, you can enquire from the experts at Blockchain Collective. Since blockchain technology is the future for businesses and industries, you can even make a career with blockchain applications for business. Blockchain Collective is an educational body working with Registered Training Organisations (RTOs) and Universities to deliver a benchmark standard of education that empowers professionals and students with the necessary skills for a future in the application of blockchain technology.
The Advanced Diploma of Applied Blockchain 10747NAT is the first-ever in Australia. This course, and the Diploma of Applied Blockchain 10849NAT, also created by Blockchain Collective, are designed to equip people willing to gain knowledge and experience in applying blockchain frameworks to any kind of business framework.