Well, if you have been confused between the bitcoin and blockchain? And, have been thinking both terms as same, then this post will clear all your confusion in a systematic manner.
Simply, bitcoin is a cryptocurrency which is created to smooth out the transaction process by eliminating the interference of third parties. Everything started with the publication of white paper named Bitcoin: A Peer-to-Peer Electronic Cash System in 2009 by an unknown person who is apparently recognized as Satoshi Nakamoto. The identity of the person is still unknown.
A Santoshi is the smallest bitcoin unit and its value is around 0.00000001 bitcoin. The most interesting point about bitcoin is that they are not issued by the bank or any recognized authority. In fact, they are mined by a group of people who called themselves miners. Bitcoins are issued in exchange for solving some complexed mathematical problems.
The blockchain is a data structure which stores information of any transaction just like a ledger entry. The information once stored here can’t be modified or changed band this feature makes the blockchain secured network. It is purely a decentralized system which is established on peer to peer network and thus eliminates any third party involvement.
The blockchain is a collection of different blocks in which information is stored in chronological order. Each block has an average capacity to store 500 transactions. Because of cryptography, these blocks are highly secured. Each block has a unique hash attached to it which can be calculated on the bases of information stored in it. When a new block is added to the chain, then it has a hash of the previous block attached to it. And, thus it’s highly impossible to change the content of the one block without disturbing another block. This feature makes the blockchain mutable.
Okay, so as we have established exactly what bitcoin and blockchain means. Importantly, we have figured out that both the bitcoin and blockchain are polar opposite from each other. Then, let’s just study some jargons of blockchain for better understanding.
Jargons Involved With Blockchain
It is immutable.
This statement means that once data is added to the block no one can change it, not even the admin. This is an old fashioned system where once information added, then it can’t be deleted or modified in any way.
It is decentralized.
This means that nothing is centrally controlled in the blockchain. Everything is scattered over the different blocks which make the system highly secured and rigid.
There are smart contracts.
They are the set of protocols or computer program that stored up in the block and is only executed when certain condition demands them.
They are set of protocols which synchronized all the modes of the network with each other. It prevents any single entity from controlling the whole blockchain system. The aim of consensus protocols is to guarantee a single chain is used and followed.
It is a process by which the data stored in a block is converted into a fixed length output through a mathematical algorithm. The value of the hash is always unique for the block, it’s impossible to create the same hash value using the same data.
Jargons for Bitcoin
Your bitcoin wallet is like your actual wallet. This contains your private key to spend or store bitcoins on the blockchain.
It is a password which can be used to spend bitcoin using the cryptographic signature.
So, now you have gathered knowledge of bitcoin and blockchain which will be very helpful for you in the future if you want to experiment with blockchain technology.