What is the difference between Bitcoin and blockchain?
Bitcoin and blockchain might be used interchangeably, but they are two different things. Since Bitcoin was an early application of blockchain technology, people inadvertently began using Bitcoin to mean blockchain, creating this misnomer. But blockchain technology has many applications outside of Bitcoin.
Bitcoin is a digital currency that operates without any centralized control. Bitcoins were originally created to make financial transactions online but are now considered digital assets that can be converted to any other global currency, like USD or euros. A public Bitcoin blockchain network creates and manages the central ledger.
Bitcoin network
A public ledger records all Bitcoin transactions, and servers around the world hold copies of this ledger. The servers are like banks. Although each bank knows only about the money its customers exchange, Bitcoin servers are aware of every single Bitcoin transaction in the world.
Anyone with a spare computer can set up one of these servers, known as a node. This is like opening your own Bitcoin bank instead of a bank account.
Bitcoin mining
On the public Bitcoin network, members mine for cryptocurrency by solving cryptographic equations to create new blocks. The system broadcasts each new transaction publicly to the network and shares it from node to node. Every ten minutes or so, miners collect these transactions into a new block and add them permanently to the blockchain, which acts like the definitive account book of Bitcoin.
Mining requires significant computational resources and takes a long time due to the complexity of the software process. In exchange, miners earn a small amount of cryptocurrency. The miners act as modern clerks who record transactions and collect transaction fees.
All participants across the network reach a consensus on who owns which coins, using blockchain cryptography technology.
What is the difference between a database and a blockchain?
Blockchain is a special type of database management system that has more features than a regular database. We describe some significant differences between a traditional database and a blockchain in the following list:
- Blockchains decentralize control without damaging trust in the existing data. This is not possible in other database systems.
- Companies involved in a transaction cannot share their entire database. But in blockchain networks, each company has its copy of the ledger, and the system automatically maintains consistency between the two ledgers.
- Although in most database systems you can edit or delete data, in blockchain you can only insert data.
How is blockchain different from the cloud?
The term cloud refers to computing services that can be accessed online. You can access Software as a Service (SaaS), Product as a Service (PaaS), and Infrastructure as a Service (IaaS) from the cloud. Cloud providers manage their hardware and infrastructure and give you access to these computing resources over the internet. They provide many more resources than just database management.If you want to join a public blockchain network, you need to provide your hardware resources to store your ledger copy. You could use a server from the cloud for this purpose too. Some cloud providers also offer complete Blockchain as a Service (BaaS) from the cloud.
What is Blockchain as a Service?
Blockchain as a Service (BaaS) is a managed blockchain service that a third party provides in the cloud. You can develop blockchain applications and digital services while the cloud provider supplies the infrastructure and blockchain building tools. All you have to do is customize existing blockchain technology, which makes blockchain adoption faster and more efficient.
