Bitcoin and blockchain are used interchangeably, but they are two different things.
Bitcoin was an early application of blockchain technology, and people inadvertently started using bitcoin to refer to blockchain, thus creating this misuse. But there are many applications of blockchain technology beyond Bitcoin.
Bitcoin is a digital currency that operates without any centralized control. Originally created to conduct financial transactions online, Bitcoin is now considered a digital asset convertible to any other global currency such as the US dollar or the euro. The public Bitcoin blockchain network will create and manage the central ledger.
Bitcoin Network
A public ledger records all Bitcoin transactions, and numerous servers around the world keep copies of this ledger. These servers are like banks, except that each bank only knows about the funds exchanged by its customers, whereas a bitcoin server knows about every bitcoin transaction in the world.
Anyone with a spare computer can set up one of these servers, called a node. It’s like opening your own bitcoin bank instead of a bank account.
Bitcoin mining
On the public Bitcoin network, members create new blocks by solving cryptographic equations to mine the cryptocurrency. The system will publicly broadcast every new transaction to the network and share this information among nodes. Every ten minutes or so, miners collect these transactions into a new block, which is then permanently added to the blockchain, which acts like Bitcoin’s final ledger.
Due to the complexity of the software process, mining requires a lot of computing resources and takes a long time. In exchange, miners earn small amounts of cryptocurrency. Miners are the modern equivalent of recording transactions and collecting transaction fees.
All participants on the network will use blockchain cryptography to agree on who owns which bitcoins.
