Blockchain has become a major meme of 2018. We explain the difference between cryptocurrency, like Bitcoin or Ethereum, blockchain technology as a concept, and blockchain software development.
The idea behind the blockchain concept is very simple – to preserve information; to create a platform such that every action on the platform is recorded in a way that it will never be lost or altered. With such a platform, a realm of possibilities comes into play opening a new era in communication by eliminating fraud of any kind. Fake news, theft, and fraudulent transactions can all be traced back to their origin. Conceptually, the perfect implementation of the blockchain concept is a system of true data.
The name blockchain originates from the implementation of this concept where blocks of data are linked cryptographically to guarantee their correctness. The blocks are then stored by multiple independent parties to guarantee that the correct sequence of events took place. So both data and actions are securely linked together and stored in multiple locations, similar to a vertically partitioned distributed database with each node operated by a different person.
Cryptocurrency is the chicken and egg to blockchain. It’s both the driving force behind blockchain platforms, and one of their natural applications. Bitcoin was first in the game in 2008 and blockchain development was coincidental for the purposes of creating virtual money that would be free of financial fraud; however, the blockchain concept persisted into other virtual tokens of value and has become a separate concept.
In itself, cryptocurrency is nothing new, and Peter Thiel reasonably noticed in an interview that PayPal was first to implement cryptocurrency back in the 90s by allowing money transfer between email addresses.
Unlike PayPay that has the liberty of voiding transactions or deleting them altogether, virtual currency based on a blockchain platform is expected to be fool-proof and immune to the whim of individual parties.
Bitcoin, Ethereum or thousands of other cryptocurrencies are different only in the way their respective platforms operate. As a consequence, we have multiple implementations of blockchain platforms with multiple implementations of cryptocurrencies on the platforms, and things are very much in flux with new platforms and tokens popping up on a regular basis.
Blockchain development is creating applications on blockchain platforms that rely on the state of true data. Being the most exciting aspect of blockchain, the development is still nascent, with no applications gaining widespread popularity. The tools for development are still very raw for useful programming, and the platforms themselves are fighting over the leadership role.