Bitcoin is a digital currency that was launched in 2009, with the intention carrying out effective online transaction by bypassing the control of any central authority like banks or government thus making it a decentralized asset.
This cryptocurrency is stored in a peer to peer network known as a blockchain than being stored in a central repository as it is in the case of any fiat currencies. The distinction is loud and clear. That bitcoin is not a blockchain itself.
Blockchain is the technology behind the occurrence and success of bitcoin. Thus from the enormous success of bitcoin we can easily conclude that bitcoin is the most successful application of blockchain till date.
But it is not the only application of this revolutionary technology. Bitcoin is transacted over a an open, public blockchain network which is very much like a operating system that runs an application on itself.
Blockchain for bitcoin is different from blockchain for business -that are much more effective- even if they share few underlying similarities. Just like a conventional ledger that attributes to bookkeeping, a blockchain is rightly considered as an online ledger that records all transaction.
In case of a bitcoin blockchain instead of any governing bodies updating the record, anyone in the network can volunteer to keep the ledger up to date. The peer to peer network ensures that bitcoin transactions are tamper proof thus consolidating trust in the system.
When we send some bitcoin to a receiving party, we don’t actually send money but an entry which contains some data, to the bitcoin network notifying the people keeping track of the records, who will then add the transaction to a block.
The network checks all our previous transactions to ensure whether the sender has enough bitcoin to send or not. Cryptography also takes care of the security issue in a bitcoin blockchain. As the bitcoin blockchain is very large, the network can get bogged down and experience delay.
Even though there are quite a lot of speculations surrounding bitcoin, the blockchain technology no doubt has amassed a huge an affirmative reputation of being the next big thing just like the internet.
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