Crypto and Blockchain are two terms often used interchangeably, but they are actually two distinct concepts that are closely related.
Cryptocurrency, or crypto for short, is a digital currency that uses cryptography to enable secure financial transactions without the need for an intermediary. It operates independently of a central bank and is decentralized, meaning it is not controlled by any single entity. Some examples of popular cryptocurrencies include Bitcoin and Ethereum.
With regular fiat currencies, digital financial transactions are facilitated by banks that ensure senders have enough money to cover the full amount of the transactions and that they don't spend more money than what is available in their account. In other words, banks ensure that if I have $100 in my account, I can only spend $100 and not a penny more. The account balances and history of transactions are kept in digital ledgers maintained and controlled by the banks.
On the other hand, Blockchain technology is a way to keep track of and verify online transactions in a decentralized system not controlled by any individual entity. It's like a digital ledger that records all the transactions that happen on a particular network.
Here's how it works: when someone wants to make a transaction (like sending money to someone else), they create a new "block" on the blockchain. This block contains information about the transaction, like how much money is being sent and who it's being sent to.
Once the block is created, it is added to the end of the blockchain (a history of other similar blocks created in the past). The block is then checked by other computers on the network to make sure that the transaction is valid (for example, that the person has enough money to send).
If the transaction is valid, it is added to the blockchain and cannot be changed. If the transaction is not valid, it is not added to the blockchain. This helps to ensure that all the transactions on the blockchain are accurate and secure without the need for a bank to keep track of everyone's balances and transaction history.
So what's the relationship between crypto and blockchain technology? Essentially, cryptocurrency is built on top of blockchain technology. In other words, blockchain technology enables the creation and use of cryptocurrency. Without blockchain technology, cryptocurrency would not exist.
One of the key features of blockchain technology is its decentralization and security. Because the ledger is distributed across a network of computers rather than being stored in a single location, there is no central point of vulnerability that hackers can target. Additionally, the use of cryptography ensures that transactions on the blockchain are secure and cannot be tampered with.
Now that you have a basic understanding of crypto and blockchain technology, you may be wondering how you can get involved. There are a number of ways to get started in the world of crypto, such as buying and holding, trading, or even mining. Just remember to always do your own research.