crytocurrency

The Difference between Blockchain and Bitcoin

I’ve been spending a good bit of time learning about bitcoin and blockchain. Bitcoin is a type of cryptocurrency used for virtual transactions. Unlike other currencies, it is not created and backed by an official government (like the United States Treasury).

Blockchain is lesser known, and it is the technology that powers bitcoin. Without a blockhain, there is no bitcoin. Blockchain is where all transactions are stored. It is open to everyone on the chain, and each transaction is identified by a hash, and it is secured by encryption.

The Middle Man’s Last Stand

So let’s say you want to send money to a loved one. If you are lucky you can make this transaction through a bank, however if your loved one lives in another country, you would have to pay a substantial fee to Western Union. Western Union is the middle man in this transaction.

What makes a blockchain different is that it is considered trust-less. This means we don’t have to worry about financial institutions being corrupt or careless about security. We can see and verify for ourselves if the money has gone through.

Many technologists claim that this technology will make transferring money cheaper and more transparent. People can send remittances without bothering with Western Union.

Experts also see blockchain technology as a way for creators to extract more value from their creations. Right now, companies like Spotify, and CDBaby act as the intermediary between the producer and consumer. Spotify still gives artists a paltry percentage of a penny for every song played. With a blockchain, musicians can directly distribute their music to fans and keep all of the profit.

Blockchain and the Rest of Us

Blockchains are a big deal, and can create a more transparent and fair economy. Technologists are optimistic that blockchains can loosen the grip of institutions that sometimes do not act in the best interest of the people they serve.However, if we take out the banks, Western Unions, and Spotifies of the world does that guarantee that disadvantaged parties will prosper?

The next question is how can the masses embrace an alternative that they barely understand. Many articles written about blockchain sorely lack an outreach component, these pieces are specifically written for programmers and executives. In order for the masses to take advantage of this technology, they need to know that it exists. The next big question is how can we get all stakeholders together to educate the rest of us about the enormous potential of blockchains.