Is Bitcoin, Blockchain?
There is a misconception about this technology as most of us still relate Blockchain to Bitcoin. Bitcoin is not Blockchain and Blockchain is not Bitcoin.
Bitcoin is money or coins which are digital and Blockchain is the technology that enables moving digital coins or assets from one individual to another.
A simple way to understand this is to think of Blockchain as one big ledger or database in the cloud. Everything that you own, including money, is not real, but just entries on a ledger. For example, if person A sends money from the US to person B in India, it is not money which flies from here to there. It’s a ledger entry which happens.
Now the problem with the current system is — since the data or ledgers are stored on central server banks where they need to validate and reconciled before initiating funds transfer and also depend on a third party for confirmation of payment. This creates friction in a payment system which involves cost and time delay in the fund’s transfer.
To overcome this problem — Satoshi Nakamoto who is an unknown face behind the creation of popular digital currency called “Bitcoin” solved this friction in the payment system where a person can directly send money from any place of the world without any intervention of middlemen or central authority i.e. banks or money transfer agents.
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