To some people, it seems as if the adoption of Blockchain represents automatically the adoption of Cryptocurrency. This is not the case!
Blockchain and Cryptocurrency are often mixed and treated as one single entity and both used interchangeably to mean one another. Nevertheless, this isn’t the case. Although, it’s just apparently like that, this simple assumption may be causing Cryptocurrency and Blockchain some individual development problems which will have benefitted the other. By individual development, I mean the adoption of one of them which to some seem like adoption of Blockchain is automatically adoption of Cryptocurrency.
Blockchain is an independent technology and a form of usage of computers and the web. It only states some guidelines for the implementation of a trustless network where there are no police or Gorvernments. The term “trustless” here means that the whole network operates in a decentralised form. Cryptocurrency on the other hand is a type of software that leverages this technology to implement some form of currency possession and transfer digitally and in an encrypted form.
So what do we mean by the idea that Blockchain is not the same thing as Cryptocurrency?
This implies that, as a technology, Blockchain isn’t only available to lunch Cryptocurrencies. But, it can be used for many other purposes. So it isn’t necessary that a person who isn’t in support of Cryptocurrency also kick against Blockchain technology.
Blockchain as defined above is a technology that states the guidelines for the implementation of a decentralised network and some form of automation. By decentralised network, it means there is no central controller or central database, every participant keep the data and only contribute to the development and progress of the network; but doesn’t have any form of control over others that may allow them to be able to manipulate the data or network activity and have some fraudulent gains to themselves. There won’t be a compulsory need for some central body’s stamp to approve network activities either.
From the very fundamental details above, we can deduce that the major problem Blockchain technology was created to resolve, is actually “Centralisation”. In the Blockchain and Cryptocurrency spaces, it is thought that centralizations is precisely the factor that makes it easy for private and public organizations to engage in manipulation and corruption.
For a decentralised network where valuable digital assets and data are processed, there must be a way to ensure that there isn’t some form of data manipulation and hacking which is common in digitalisation. Blockchain technology implementation states the ways by which we can ensure that there isn’t any form of centralisation and data manipulation at all. That is where the technology parameters came in which include mining, hashing, blocks and others.
It should be clear that Blockchain isn’t created for cryptocurrency, but to tackle the issue of centralisation which has generated social and financial injustice as well as issues as data leakage and manipulation. Some other problems are the recent Facebook data issue, hackings and others in which case many users’ data was acquired by third parties unwillingly. Of course with Power comes a Great responsibility and humans, over the years, have been failing in the control and management of power.
So Blockchain can be implemented in any form for any reason so far it is using the decentralised protocol of Blockchain technology.
And while Bitcoin (the first Cryptocurrency) was created by Satoshi Nakamoto in 2008 (released in 2009) the first Blochchain conception was dated to 1991 as an idea to prevent manipulation of data.
The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to implement a system where document timestamps could not be tampered with. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several document certificates to be collected into one block.
Cryptocurrency is the first recorded implementation of a Blockchain protocol, it employs the decentralisation of Blockchain to implement a kind of digital asset where there is no central control in the creation, acquisition and transfer of those assets. The first implementation is of course Bitcoin.
An analogy is that Satoshi Nakamoto is tired of the FIAT system – or just thinks the future is digitisation – then he wanted a kind of currency that will be totally digitised, but at the same time, he doesn’t want a case where the currency is controlled by a central body or issued by them. He did not want to repeat the same error as in FIAT where Governments print as much as they want. So what is the go-to technology for this? Of course it has to be Blockhain technology, with a few modifications it will be used to suit the need of Cryptocurrency.
And that is how Satoshi implemented the Blockchain and named the asset Bitcoin as the first kind of asset called Cryptocurrency- If not for the enjoyment that Government and NGOs get in the total control of Centralised system, Bitcoin may not have been the first implementation of Blockchain, why? Because it is just an amazing technology that also implements some form of automation that the world is shifting to.
So YES, Bitcoin became the first implementation of Blockchain and after Bitcoin, many other cryptocurrency assets were developed to tackle different kinds of problem and implement some solution like Ethereum implement the Smart Contract, Monero and Zcash for privacy and many others. And Blockchain technology became widely known as Cryptocurrency technology.
Facts and Differences
Reading through you’ll have comprehended the fact that Blockchain is different from Cryptocurrency. Blockchain is a technology that just enforces decentralisation and some automation. Cryptocurrency on the other hand is a digital asset that is created to be decentralised and by so it chooses Blockchain as the protocol to use for its activities.
Blockchain can be implemented on many other aspects of our life apart from Cryptocurrency, some notable aspects that has been implemented in recent times include:
- Voting: imagine a Blockchain voting system, there will be total data security and almost zero chance of manipulation, looking at the last voting process in USA which some believed was controversial, Blockchain technology can help manage such situation and there won’t be a need to waste money on opening up a million dollar investigation after the election.
- Banking sector: of course cryptocurrency has some implementation of this already, but implementing a 90% Blockchain banking system will improve the sector, automation needed will be introduced and with little possibility of manipulation.
The list goes on…
Here, we’d like to call awareness to the fact that the fear of Governments on the possibility of FIAT replacement with Cryptocurrency which won’t allow for total control, is preventing the usage of a wonderful and state of the art technology like Blockchain. It is our duty to enlighten them on the beauty of this technology and that its implementation may soon become compulsory on us with the current digitisation trend.
But like the saying goes; “The early bird catches the early worm”, the implementation of Blockchain will mean a lot for Cryptocurrency adoption and we might just see a National Crypto-Currency, what to say? The adoption may be inevitable and that’s the benefit of catching the next big tech at the early stages… Good of you @Satoshi.