Blockchain and Bitcoin: The Root and The Tree

Every digital information must be recorded as well as distributed, this was the aim when blockchain was invented. This might be difficult to grasp in the first place. So let us discover and understand how the first application of blockchain technology actually started.

THE BACK STORY:

Stuart Haber and W. Scott Stornetta sketched the blockchain technology back in 1991 for the very first time for the implementation of timestamps without alterations. 

It was just 2 decades later when blockchain showcased its real-world application- BITCOIN in Jan 2009.

WORKING:

The protocol which Bitcoin used was built on Blockchain. Pseudonym creator of Bitcoin SATOSHI NAKAMOTO introduced it as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party”, in the white paper published by him.

Unlike fiat currencies which are regulated and authenticated by a central authority, usually a bank or government, the cryptocurrencies (like BItcoin in this scenario) are regulated and authenticated by a network of computers called Nodes.

Each time a person spends his/her Bitcoin to buy a commodity the computers on that Bitcoin network authenticate his/her transaction. At that time the user runs a program in order to solve a mathematical problem known as a hash to get his/her transaction verified on the Bitcoin network.

As soon as the hash problem gets solved, the algorithm simultaneously authenticates the block’s transactions. After that, the transaction is recorded publicly and stored as a block on the blockchain. Once recorded on the blockchain, the transactions are unalterable.

The miners who work to mine the hash, get rewarded with cryptocurrency for successful validation. 

It is important to note that all the transaction details are publicly recorded on the blockchain but the user information is not. To conduct transactions on the bitcoin network, one uses “wallets”. The details of the owner of the wallet are not stored on the blockchain. To access this wallet, one needs to have its public and private keys. 

To learn more about Public Kry and Private Key, stay tuned for our next Blog, Public Key VS Private Key. 

BLOCKCHAIN IN A NUTSHELL 

Blockchain is basically an open secure ledger that helps in transactions between peers.

This makes Bitcoin’s blockchain as Bitcoin’s ledger. Today Blockchain has evolved and is efficient enough to cater even the smallest transactions across varied industries.

BITCOIN IN A NUTSHELL

Bitcoin is a cryptocurrency which was basically derived from the Blockchain technology.  The main purpose of its invention was to boost cross border transactions and to decrease the governments’ control over the transactions thereby simplifying the entire process, without any type of involvement from the 3rd party intermediaries. 

Although it is not formally accepted yet people across the planet are using it willingly for several kinds of transactions. The fact that unlike fiat currency it’s not tangible makes it intriguing.

Both Blockchain and Bitcoin are interrelated terms. While Blockchain is the technology behind Bitcoin, Bitcoin in itself is just one of the several things that blockchain can do. 

Let us take a few minutes to understand the key difference between Blockchain and Bitcoin:

  • Adaptability is one of the key differences between Blockchain and Bitcoin. While looking at Bitcoin one see something that is rigid and just focuses on cross border transactions. Whereas a Blockchain has evolved itself with improvement over the years and is now catering to a hoard of industries not limited to the financial sector. 
  • Bitcoin is used for cross border transactions and to decrease the charges as well as the time of that transaction. While Blockchain works as a distributed ledger that allows peer to peer transactions in a safe environment. Blockchain also makes the transactions public and promoted transparency. 

Blockchain And Bitcoin – Final Thoughts

Both bitcoin and blockchain have their own strengths. While Blockchain is the technology Bitcoin is based on; Bitcoin is the first and key element derived from a blockchain. In this digital age, it is certain that more and more people looking to get the advantage of bitcoin and blockchain. 

Bitcoin and other altcoins like Ethereum, Feelium, Litecoin, etc. are gaining prominence in cross-border transactions. But blockchain technology has more applications in different sectors like Banking, Cybersecurity, Music Industry and more

Crypto Market Adds $7 Billion, Bitcoin Breaks Above $4,000 Amidst Widespread Crypto Surge, Ethereum Faces Strong Resistance

The Bitcoin price recently spiked from $3,830 to $4,051 by around five percent. Bitcoin has now broken above its resistance level that was previously set around $3,900. Bitcoin’s upwards move has sent the overall markets surging. The sudden increase in the price of Bitcoin led other major crypto assets to spike in value.

Ripple, Bitcoin Cash, Litecoin, EOS, and Stellar recorded gains in the range of 3 to 12 percent on the day, demonstrating solid momentum over the last 24 hours.

Bitcoin is showing signs of increasing buying pressure, many altcoins have not yet been able to break above their resistance levels, with Ethereum still trading below $160.

The cryptocurrency’s price action is certainly a positive development for the, but one analyst claims that it must maintain above this price level for the rest of the day in order for him to turn bullish.

Mati Greenspan, senior market analyst at eToro, also mentioned the latest move up in a recent tweet, saying that Bitcoin’s big test remains at $5,000.

Cryptocurrency trader with an online alias “The Crypto Dog” said, the valuation of cryptocurrencies would have to break out of major resistance levels in the range of $160 billion to $180 billion to call for a convincing short-term rally.

Panaesha Capital Pte Ltd.

Altcoins Jump, Ethereum Faces Strong Resistance

Although most altcoins have surged, Ethereum is still stuck under $160, which is becoming an increasingly strong resistance level. At the time of writing, Ethereum is trading up marginally at its current price of $152.

Ethereum’s price has climbed significantly over the past month on investor’s expectations for its upcoming Constantinople fork event which is scheduled to occur around January 16th. Several weeks ago, in mid-December, Ethereum was trading at $83, from which it is currently trading up over 90%.

Ripple, XRP is currently trading up 3.2% at $0.369 and is still trading below its one-week highs of $0.38. Litecoin is one of today’s best performing altcoins and is trading up nearly 12% at its current price of $39.3. Litecoin is up from weekly lows of $30.

For three months the market has hovered between $100 and $140 billion. As seen in the yearly chart below, short-term volatility in a low price range doesn’t present a proper accumulation period.

Many traders anticipate an increase in market capitalization to $180 billion as a potential catalyst for a mid-term rally. Even a recovery to $200-$250 billion range could still leave the market vulnerable to a future additional drop in value.
There exists several catalysts in the likes of the scheduled launch of Bakkt, the U.S. Securities and Exchange Commission (SEC)’s decision on the VanEck Bitcoin exchange-traded fund (ETF) filing, and the development of Nasdaq’s Bitcoin futures market that may contribute to a potential rally of cryptocurrencies in the first quarter of 2019.