Recently, many have voiced their love for blockchain, but not so much for crypto. They are of the opinion that blockchain could revolutionize many industries but cryptocurrency is the wrong use case. This is in a world which is still getting used to the term crypto and blockchain where many still don’t understand the fundamental difference between the two. This would seem to be fair as many of the projects that are happening now are no longer related to crypto but to blockchain solely.
Blockchain vs crypto
To understand the topic, there needs to be a clear understanding of what the fundamental difference between blockchain and cryptocurrencies is. Basically, it’s the relation between a car and its engine. An engine drives the car but the engine can be used to power many things. Similarly, cryptocurrencies depend on blockchain to confirm transactions and the balance each account holds, but blockchain can be used for much more. Blockchain can be visualized as a long linked list where information is stored. The information stored is immutable, distributed and the information in the new block depends on the information on the old block. In the case of cryptocurrencies, this immutable and distributed nature of blockchain is used to prevent double spending and manipulation, while in other industries like in logistics, the movement of every component can be tracked precisely. Day by day, its becoming clearer that blockchain can be used for much more than just cryptocurrencies.
The first major altcoin built on the blockchain, Ethereum, has a feature which allows it to be more than just a cryptocurrency. Ethereum provides developers the ability to run programs in the blockchain. Even though Bitcoin provides scripting, it wasn’t as good as that provided by Ethereum. This is precisely the reason why if you step into a hackathon, most projects will be done in Ethereum or most ICOs are issued using Ethereum. This can be seen as the major stepping stone for blockchain becoming more than just crypto. Ethereum at its core still ran on blockchain but gave the ability to do more than just send and receive money. The launch of Ethereum changed the face of the industry. ICOs became huge and the prices of cryptocurrencies skyrocketed. Finally, people began to notice crypto.
Hyperledger is an open source blockchain project founded by the Linux Foundation and is supported by many like industry giants like IBM, Intel, and SAP. Founded in 2015, Hyperledger is a step up from Ethereum in a sense. It gives much more ability and control to the developers, but there is no crypto involved at all. This means that unlike Ethereum which is a cryptocurrency, Hyperledger is purely blockchain, it’s no longer a currency or a token. Blockchain has the ability to stand alone. Many like it while many despise it. Most who like this move and embrace it see this as a natural progression and moving away from crypto as inevitable. This is also the precise reason why many crypto purists hate it as they see it taking the technology from its original purpose of replacing the banks.
Recently in the World Economic Forum held in Davos, the CEO of PayPal and blockchain venture capitalist Jeff Schumacher, and Mark Carney, the senior advisor to Bank of England governor were a few who went on to bash cryptocurrency and praise blockchain. They are part of a growing number of people who see blockchain having real-world relevance and a future but refuses to accept crypto as any part of that future. JP Morgan, in the meanwhile, came up with a report which paints a dull future for Bitcoin, predicting BTC would fall below $1260 if the bear market continues. The report elaborated Bitcoin’s use as a Medium of Exchange (MoE) and Store of Value (SoV) is highly unlikely. But something everyone agrees is that blockchain technologies will succeed and gain mainstream adoption. But there is a catch, if blockchain is separated from cryptocurrency there is no incentive for people to run nodes in a blockchain which would mean companies will have to run their own nodes which will destroy the whole concept of decentralization.
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