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BlockChain and Cryptocurrency-How are they related?

Blockchain and Cryptocurrency! That’s quite a buzz word nowadays in technology—an extraordinary invention brought upon us by Satoshi Nakamoto


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Tealfeed Guest Blog

3 years ago | 3 min read

Blockchain and Cryptocurrency! That’s quite a buzz word nowadays in technology—an extraordinary invention brought upon us by Satoshi Nakamoto: person or group of people known by this alias.

What about cryptocurrency? As usual, you might consider them as synonymous terms. That’s what stuck me up as I was in talks with a few of the people, who are part of the industry. To make things more ambiguous, marketing efforts as well wants to create space for a play that is as fast and loose as the recent decision of ICC for the World cup finals.

Furthermore, the overall effectiveness comes with ruins of the fluency in the understanding of the industry newbies.

I would want you to get past that with this article. By the time you consume this, you will know the difference and the connecting links as well.

LET’S SEE THE CONNECTING LINKS

Basically, the connecting link has to do with how distributed ledger technology is used. Keep reading for a clearer idea.

Blockchain and “distributed ledger” technology. (Image Source: Blockruption)
Blockchain and “distributed ledger” technology. (Image Source: Blockruption)

For instance, consider “Upwork”. You have got to buy the connecting points for a price for quoting the clients. It’s a kind of ‘token’ you use to quote, which has no significance for quotation power in other platforms.

For real-time basis, correlate the token as a cryptocurrency that you can use in every other compatible platform. Technically, the most popular are—Bitcoin, Etherium.

The other side of the coin is the “Platforms” are the BlockChain and Cryptocurrency network. In this mock story— that’s Upwork. Whereas, in reality, the networks camouflages the name of the cryptocurrency. We have public blockchains dedicated to bitcoin and Etherium; Private blockchains like Hyperledger and R3 Corda; Hybrid blockchains like Dragon chain.

Apparently, the distributed ledger technology that forms a “chain of blocks.” Each block records the transaction bundles. Every transaction is formed with three parties—the sender, the recipient, and the miner.

More so, cryptocurrencies are the tools for a transaction in BlockChain and Cryptocurrency network. Imagine bitcoin as INR and Etherium as USD with encryption.

THE EXACT WORKFLOW OVER BLOCKCHAINS

Let’s say you want to buy certain goods or services using bitcoin. With you pay the amount there are tons of computers on the BlockChain and Cryptocurrency network race to verify the transaction.

The future of cryptocurrency. (Image source: UCF.edu)
The future of cryptocurrency. (Image source: UCF.edu)

What they do is run a program on their computers and try to solve a complex mathematical problem, called a “hash.” Your transaction is verified with the proof of work, the algorithm hashes with a block. The completed transaction is publicly recorded and stored as a block on the blockchain.

In the case of Bitcoin, and most other blockchains, computers that successfully verify blocks are rewarded for their labour with cryptocurrency.

THE PROCEDURE:

  • The platform is like a spreadsheet with information about transactions.
  • Each transaction results in a hash.
  • A hash is a string of numbers and letters.
  • Transactions are followed with new to the old order. The old ones are placed deep.
  • The hash status is related to present and previous transaction’s hash.
  • Even a small change in a transaction creates a completely new hash.
  • The nodes check to make sure a transaction has not been changed by inspecting the hash.
  • If a transaction is approved by a majority of the nodes then it is approved into a block.
  • Each block refers to the previous block and together make the Blockchain.
  • These computers are called nodes.
  • The BlockChain and Cryptocurrency update itself every couple of minutes.

DOES EACH CRYPTOCURRENCY HAVE ITS OWN BLOCKCHAIN?

Most importantly, the cryptocurrency finds verification of a network of computers called nodes. Resonates much with the use of printed currency is regulated and verified by a central authority, usually a bank or government?

SCOPES FOR CRYPTOCURRENCY
    1. Guardtime: They create “keyless” signature systems using blockchain to secure the health records.
    2. Samsung is looking up to launch its own blockchain platform—Ethernet-based frameworks.

THE FINAL WORDS

Being a decentralized ledger, all transactions happen across a peer-to-peer network. Potential applications are able to do fund transfers, settle trades, vote and many more things. You don’t need a central clearing authority. You have got increased transparency with accurate tracking done.  Nevertheless, you have to vigilant with the various methodologies for various currencies.

Overall investing in “Cryptocurrency” over a blockchain network can be a good shot.

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