1.2.bitcoin and blockchain

 

bitcoin and blockchain

What is the relation? 

Remember, Blockchain is a technology, and Bitcoin is an implementation of Blockchain. It is just a product built on top of it. Just like Google or Facebook is an implementation of the World Wide Web (www) and networking. There are many more such implementations or applications built using Blockchain like Ethereum, ripple, stellar, Stratis, etc. 

For instance, the below image is a Bitcoin explorer; you can view all the transactions taking place in bitcoins all over the world, just by going to this website. It is publicly available. Although you wouldn't know how to make sense out of the addresses, it is almost impossible to track these addresses if the user has used VPN or proxy servers while making transactions. Otherwise, these can be traced to the user's IP address. Although, if you buy bitcoins from a reputed wallet or exchange, the user will be asked to provide their KYC details, so that it is easy to put a face to this address to prevent frauds. 

Bitcoin was built to simplify transactions without involving a trusted third party, by bypassing government control of currency. And as we already know by now, it does so by maintaining thousands of ledgers all over the world and making all transactions transparent and public. If A transfer tokens to B and there is no trust relationship between them, then B doesn't have to worry if he will have the money or not. Similarly, A also doesn't have to worry if B will deny getting the token even if he got it. Both of them can see it publicly by using their addresses on the Blockchain, whether the transaction was made or not. 

Similarly, Ethereum is another product built using Blockchain technology. You can go to their website and view all the transactions. 

Another groundbreaking product built over Blockchain is Ripple. Ripple's distributed financial technology enables banks to send real-time international payments across networks. Ripple is a private network, and not everybody can join it. It only provides its services to banks and other financial institutions. It boasts about having more than 80 financial institutions on board with it all over the world as of today. And this includes some widely popular banks. 

Now you will wonder why all these banks want to be a part of ripple? International payments for businesses and cross border remittances have always been tricky, and with the government regulations involved on both ends, there are lots of time and money involved. Suppose that you want to send money from India to the USA. On average, this takes about 6-7 days and quite a fee. The minimum time required to transfer money is 4 hours, and this also comes with bad exchange rates and higher costs. Now, if your bank is using ripple, and the receiver's bank is also on board with ripple, then this entire process would take not more than 1-2 minutes (depending on the network congestion). Since ripple is private, we can count on the lesser fee and time taken.