Cryptocurrency and blockchain are inseparably linked, but don’t confuse the two.
Cryptocurrency is digital money that has no physical counterpart in the real world. It is used as a peer-to-peer electronic payment system. Crypto corresponds to real money and has an official exchange rate in respect to the national currencies. For example, ZAM token is now trading at $ 0.03.
Blockchain is a technology where the records and data are stored in blocks using encryption – a cryptographic hash. This type of database is usually used to store the information about cryptocurrency transactions and can be both publicly and privately available. The main difference from centralized databases is that blockchain information cannot be deleted and falsified. Fundamentally speaking, any data can be recorded and stored in the blockchain, including deliveries, orders, payments, and private information.
Databases allow you to store terabytes of digitized information in the form of a simple table. Unlike conventional tables, where a limited number of individuals with a modest amount of information can work at the same time, the database contains much more information and allows simultaneous access to the data for an unlimited number of users. The main issue here is full control over the data on the part of the company managing the servers. The information in such databases is highly vulnerable. An employee or, if you will, a hacker can easily fake or steal data and proving that, for example, your bank account had $ 100,000 and not $ 100, becomes almost impossible.
Blockchain and other databases
Blockchain technology writes data into a sequence of blocks, not a table. Blocks are created in a decentralized way by multitudes of users who possess a special software installed on their computers called nodes. Transaction data within the blockchain network is encrypted using end-to-end encryption.
End-to-end encryption is a data transfer method which only allows the sender and receiver to access the encryption keys. Thus, no one can change data inside the blockchain and take possession of your cryptographic key.
Key characteristics of the blockchain
- Decentralized governance
- Changelessness of data
- Built-in functionality of smart contracts
A smart contract is a self-contained program code that sets the rules for the future user interaction on a network. A smart contract can dictate the terms of corporate bond transfers, include travel insurance payout terms, and more.
What makes blockchain so popular
The modern economy needs a transparent and secure instrument for carrying out financial transactions, just as a responsible merchant or vendor needs reliable information about the products that he gets.