Understanding Cryptocurrency Forks
February 12, 2025
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When a new investor enters the world of cryptocurrency, they often use two terms mentioned together. These two terms are “cryptocurrencies” and “blockchain”. The two terms are used together so often that it gives many investors the idea that they both mean the same thing. This is particularly true if the investors are not tech-savvy. In this article, we will have a closer look to understand what the terms blockchain and cryptocurrency mean and how they are related to each other.
It is common for investors to assume that blockchain and cryptocurrency are the same thing because both these terms became popular at the same time. However, the fact of the matter is that cryptocurrencies have only made blockchain popular. Blockchain technology has existed for a significant amount of time. However, it was not widely used. The blockchain is the very foundation on which cryptocurrencies are standing. If the blockchain ceases to exist, there would not be any cryptocurrencies. However, if cryptocurrencies cease to exist, blockchain technology could still be put to use in other sectors.
Blockchain is a way of digitally managing data in a decentralized format. The two keywords are “digitally” and “decentralized”. The working of a blockchain is described below:
Blockchain technology works just like an e-mail. Hence anyone who has access to e-mail can also utilize blockchain technology for fund transfers. Blockchain also ensures that transactions take place at a rapid speed. A certain time lag has been built into the network in order to enhance security. Apart from that, cryptocurrency transfers can be considered to be almost instantaneous.
To sum it up, blockchain and cryptocurrencies are two related but different concepts. Cryptocurrency is by far the biggest application of the blockchain concept. However, it is not the only application by any means. On the other hand, the success of cryptocurrencies has ensured that blockchain is shot to fame after existing for many years in digital obscurity.
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