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    What do you mean by Blockchain Currency?

    Before understanding(go to blockchain.login) how blockchain and cryptocurrency twin together, let us first brief you about the precepts of cryptocurrency.

     

    What exactly is Blockchain Cryptocurrency?

    Basically, a digital asset, blockchain cryptocurrency is designed to work as a medium of exchange. Unlike physical currencies, blockchain cryptocurrency works on digital channels and are often adhered to strong cryptography to secure financial transactions that happen online. These cryptographs or encryption layers may also be used to control the creation of additional units and verify the transfer of assets. Blockchain cryptocurrency can have several types. They are Bitcoin, Litecoin, Ripple, Ether, etc.

     

    With the advent of blockchain currency, it became possible to create something that is not possible to be duplicated and can be sent directly from one person to another. These transactions do not require a trusted third party, organization, or computer server in the middle that serves as the source of trust.


    The supply and value of cryptocurrencies are controlled by the activities of their users and highly complex protocols which are built into governing codes. In particular, the activities of miners—cryptocurrency users who anchor sophisticated computing functions to record transactions and receive newly created cryptocurrency units and transaction fees—are critical to the stability and smooth functioning of cryptocurrencies.


    Following is a detailed diagram of how cryptocurrencies work in real-time.

    The most striking difference between blockchain currency and the physical currency is the fact that blockchain cryptocurrency uses a decentralized system for controlling transactions as opposed to the centralized digital currencies and central banking systems. This decentralized feature is based on a distributed ledger technology which is typically a blockchain that serves as a public financial transaction database.


    What do we understand from this?

    Blockchain and Cryptocurrency are not the same, as they have been referred to historically!

    While blockchain currency is a mode of online transactions, blockchain is the technology underlying it. Blockchain drives the whole concept of cryptocurrency. It is interesting to note that blockchain was designed to manage cryptocurrencies. Blockchain simply stores data on a distributed ledger. Different blockchain projects aim to store different types of data on their blockchains, from real estate details to contracts, and, of course, to virtual currency values. Cryptocurrency is just another type of data that can be stored on a blockchain.
    PS: As a matter of fact, bitcoin—the most popular type of blockchain cryptocurrency—was the first implementation of blockchain currency.

    Learn about the economics in Blockchain in our blog on Blockchain Economics.

     

    Blockchain and Cryptocurrency: A lasting love affair

    The blockchain of a cryptocurrency is the master ledger that generally records all prior transactions and activities, validating the ownerships of all units of the currency at any given point of time. The blockchain contains the entire transaction history of a cryptocurrency as a record. It has a finite length containing a finite number of transactions that eventually surges in due course of time. Identical copies of the blockchain are stored in every node of the cryptocurrency’s software network. This network of decentralized server farms is managed by tech-savvy individuals or groups of individuals known as miners. Miners continually record and authenticate cryptocurrency transactions.