Data

Understanding the difference between Blockchain and Cryptocurrency

It is common for there to be confusion when new technology comes out. Blockchain and cryptocurrency are two of the latest examples. Blockchain and cryptocurrency are very much inter-related. However, they are not the same nor interchangeable.

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BLOCKCHAIN FOUNDATION

The blockchain technology and methods are the foundation that supports a number of different applications including cryptocurrency. There are, however, a vast number of enterprise applications and use-cases that leverage blockchain but have nothing to do with cryptocurrency. These applications often leverage one or both of the two core features of blockchain: 1) shared trust and/or 2) smart contracts.

BLOCKCHAIN-BASED APPLICATIONS

Cryptocurrency, on the other hand, is a logical currency that leverages the underpinnings that blockchain brings. Today, enterprises are building applications that leverage blockchain in very novel ways. The vast majority of these applications have nothing to do with cryptocurrency.

SOLUTION LOOKING FOR A PROBLEM

One of the downsides to new technology is when it becomes the solution looking for a problem. Many of the ‘blockchain experiments’ happening in enterprises today resemble this statement. There are good use-cases for blockchain-based applications in the enterprise. However, many of the experiments happening today would be well-served with just a relational database.

That is not to say that experimenting with blockchain is bad. In fact, it is a good to learn about the features and limitations of the technology in order to find the right use-cases. The best enterprise use-cases happening today are solving problems that were not solvable using past methods.

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