The words “cryptocurrency” and “blockchain” are often incorrectly used interchangeably. Though the two are related, they have some drastic differences and functions that couldn’t be further from one another.
At the same time, you can’t really understand one without understanding the other. Here’s a simple understanding of each, which should help put any and all confusion to rest.
Blockchain is the technology powering cryptocurrencies.
A blockchain is a time-stamped series of immutable data records managed by a decentralized network of computers. Each of these blocks of data are secured and connected to each other using cryptographic principles and technologies.
Like certain peer-to-peer technologies, blockchain technology requires multiple computers to be online and running at any one time in order to keep the blockchain alive and afloat. With different computers transmitting, storing, and auto-course-correcting the blockchain, it becomes an indisputable and tamper-proof way to store information. This network of computers without one central computer running everything is a called a decentralized network.
Cryptocurrencies are digital currencies running on blockchain technology.
A cryptocurrency “token” is a digital asset powered by blockchain technology. Almost all cryptocurrencies are decentralized, in the sense that no one person, company, or agency controls them. Their records are stored on a blockchain, along with transaction information, value, and other data.
For instance, Ethereum is a blockchain, and Ether is the token powered by the Ethereum blockchain. Transactions of Ether are recorded on the Ethereum blockchain, but the blockchain has applications that are independent of Ether.
How does Cadence use blockchain?
Cadence is exploring the use of blockchain technology to unlock operational efficiencies. These efficiencies will grant our investors access to attractive assets that were otherwise cost prohibitive to administer. We will discuss more on this and other blockchain applications in the future.
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