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Blockchain|Blockchain Nuts & Bolts

What Is the Difference Between Cryptocurrency and Blockchain?

what is the difference between cryptocurrency and blockchain?

The crypto world is full of jargon. Let’s see if we can untangle a couple of closely related topics that are often not expressed clearly: the difference between cryptocurrency and blockchain.

A cryptocurrency is a form of digital money. Bitcoin, Ether, Litecoin, Tether, and Cardano are examples. Units of cryptocurrency are called coins or tokens.

A blockchain is a distributed peer-to-peer database that has strict rules for adding data. Each cryptocurrency is associated with a blockchain that serves as its open ledger.

Behind the Bitcoin cryptocurrency is a blockchain known as the Bitcoin blockchain. Ether runs on a blockchain database called Ethereum. Litecoin has its own blockchain, which is derived from the open source Bitcoin blockchain.


Tether doesn’t have its own blockchain. Tether tokens exist on the Ethereum blockchain, and that’s where Tether transactions are recorded. Ethereum was designed for maximum flexibility, and many tokens are hosted there.

Ethereum is so flexible that in addition to cryptocurrencies, the Ethereum blockchain hosts most of the market’s most popular non-fungible tokens, or NFTs. Those tokens are like cryptocurrency coins and tokens except that each NFT has a unique identity, like a serial number, so individual tokens can have different values.

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See how simple that is? Now when you are asked “What is blockchain, and cryptocurrency – isn’t that the same thing?” you will be able to answer with confidence.

NOTE

This text is informative in nature and should not be considered an investment recommendation. It does not express the personal opinion of the author or service. Any investment or trading is risky, and past returns are not a guarantee of future returns. Risk only assets that you are willing to lose.

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