Bitcoin vs Cryptocurrency
Bitcoin and Cryptocurrencies are undoubtedly one of the most exciting phenomena in the tech and financial world right now. But what do they mean and are they same or different? Cryptocurrency is basically a form of latest technology that is designed to act as a medium to facilitate secure financial transactions. Bitcoin is the world’s first and currently the most popular cryptocurrency. Let’s see more about them and Bitcoin vs Cryptocurrency.
Cryptocurrency
Cryptocurrency or crypto is a form of decentralised digital currency that can act as a medium of exchange through a computer network without the need of any central authority like a government or banks to maintain it.
It can only be stored in a digital wallet and any payment made using crypto exists purely as a digital entry on an online database.
Being a form of digital currency, crypto does not exist in the physical form (unlike fiat currency) and is 100% virtual. As they are decentralised cryptocurrencies are also not issued by any bank or central authority whatsoever but instead work with distributed ledgers operating across an international network of computers.
Earlier designed solely for digital transactions, today cryptocurrencies can be used for trading almost anything through the internet ranging from groceries to cars. The crypto market has become so attractive that companies around the world are enthusiastic about them.
Bitcoin
Bitcoin is the world’s first ever cryptocurrency. Today, it also stands as the most popular and the largest cryptocurrency in the world based on market capitalisation. It was created in 2008 by Satoshi Nakamoto (commonly considered to be a pseudonym for one or a group of developers) as an open-source software for money transfer.
Essentially, Bitcoin is a type of cryptocurrency which operates without any central authority, across borders and without the involvement of many intermediaries. All of this significantly lowers the transaction cost and allows super fast transactions.
Difference between Bitcoin vs Cryptocurrency
Cryptocurrencies have definitely sparked a revolution in the world of technology, finance and business as they offer a new, innovative and fundamentally secure way for business transactions to occur with the snap of a finger and minimal transaction costs. Let us look at some ways in which Bitcoin differs from cryptocurrencies.
| Bitcoin | Cryptocurrency |
| Bitcoin is the most popular cryptocurrency and holds the Lion’s share of the Cryptocurrency market. | There are a lot of cryptocurrencies in the world right now and new ones are created every day. |
| Bitcoin aims for faster and cheaper transactions but it lacks flexibility. | Cryptocurrencies are designed to be used in exchange for goods in a secure way with no third parties involved. |
| Bitcoin ledgers can be accessed but are meaningless to unauthorised persons as they are not in a particular order. This is done to ensure transparency but not at the cost of privacy. | Recent cryptocurrencies offer more transparency in comparison. |
| Bitcoins can be stored only in a Bitcoin wallet. | Different cryptocurrencies can either be stored in individual digital wallets or a single preferred digital wallet. |
| All bitcoins are generated using mining, which is an energy intensive process involving high-tech computers used for solving complex mathematics. | Although most cryptocurrencies are also mined, lately a lot of cryptocurrencies are adapting other, more eco-friendly routes for token generation. |
| There is a maximum number of bitcoins that can be mined, which is almost equal to 21million. Hence there can only be 21 million bitcoin tokens in existence. | A lot of cryptocurrencies do not have any such cap on the number of tokens that can exist. |
Bitcoin is a technology
The core difference is that Bitcoin is a technology. Initially, it was used interchangeably with cryptocurrency because in the early days of blockchain, a cryuptocurrency was its only use case. Today however, the technology has branched in numerous ways and has a huge set of real world applications.
Cryptocurrency is an Asset
As opposed to blockchain which is a technology, cryptocurrency is an asset. It can be used as an exchange medium for goods and services referring to the token because the technology is often right in the case of Bitcoin. However, it is incredibly completely different once managing an alternative blockchain comes like Ethereum. During this case, technology can be understood as Ethereum. However, the native token is Ether, and transaction pay in gas.
Conclusion
In this article, we discussed what Bitcoin and cryptocurrencies stand for. How Bitcoin is actually a form of cryptocurrency and differences between bitcoin vs cryptocurrency in general. We then discussed numerous ways in which bitcoin is different from other cryptocurrencies.