Bitcoin vs Blockchain

As we explore the technology behind blockchain, it is important to understand what role bitcoin plays. Bitcoin is a digital currency launched in 2009, intending to simplify online transactions by bypassing government control of currency. It does this by storing and transacting the currency over a peer-to-peer network, a blockchain, rather than using a central monetary repository.

It’s important to make the distinction that bitcoin is not a blockchain itself. Bitcoin is transacted over an open public, anonymous, blockchain network. You can think of blockchain as the operating system, and bitcoin is one of the many applications that run on that system. The blockchain that underlies Bitcoin has some fundamental similarities, but also key differences, to a blockchain built for business such as the Linux Foundation's Hyperledger Fabric.

Both are cost-effective as they increase the speed of transactions and reduce overhead costs. Both are highly efficient, as the transaction is recorded once and is then visible to all parties through the distributed network. Both are Tamper Clear. The transaction cannot be changed. It can only be reversed with another transaction, in which case both transactions are visible.

However, a bitcoin blockchain is limited in a few ways. It is primarily designed to transact cryptocurrency and is also open, meaning anyone can join and view every transaction. That's ever happened on the network. It is anonymous, meaning it is nearly impossible to know the identity of who is involved in a transaction. Because of this, it requires heavyweight cryptography to deter fraudulent activity, which requires significant computing power.

These characteristics lead to many issues around efficiency. Confidentiality, security, and trust when conducting business, especially around regulated industries. A blockchain built for business enables you to exchange anything of value, whether tangible, like a car or house intangible, like a patent or copyright, or digital like videos or photos., It is private. So the invited members know exactly who they are doing business with. It is permission, so participants are only given access to data relevant to them, and it runs on smart contracts, business logic, embedded into the network, reducing disputes and increasing trust. The blockchain for business. It also uses selective endorsement, which allows participants to control exactly who verifies transactions. These qualities make a blockchain for business more efficient, more secure, and more effective across your business networks.