There is a famous riddle Which came first Chicken or Egg? can you answer this riddle? I understand your situation after seeing this type of question because we are all been there.
Many crypto enthusiastic could not find out the answer for Which came first Blockchain or Bitcoin(cryptocurrency)?.
It is a famous riddle in the crypto world because of Santosh Nakamoto funded both Blockchain and Bitcoin at the same time.
Let’s be clear Blockchain is a technology that helps Cryptocurrency to become Cryptocurrency, and Blockchain has its own broad usage rather than just be usable in cryptocurrencies.
It sounds like a fighting for the first spot, let it be.
Ok now, look at some important factors in the blockchain technology that helps cryptocurrencies to become what it is.
Before going to that, if you still wondering what is blockchain? how does it work? then you must watch below the video.
Blockchain Makes Cryptocurrency Decentralized.
Without blockchain technology, we cannot imagine decentralized digital currencies.
From the above video, you already know that blockchain is like decentralized ledger and it uses cryptography and other things.
Then you can imagine how typical currency and decentralized digital currencies work.
Currency system work under government instructions, but other hands cryptocurrencies work decentralized and giving the power to every member in the community.
That’s why you can’t imagine decentralized cryptocurrency without Blockchain technology.
Blockchain Stores Every Transactions Data.
The blockchain is like a decentralized ledger book and every page of that book called as blocks.
Every block contains data, in case of cryptocurrencies every block contains transactions data made by the currency users.
For example, If you send 1 Bitcoin to your friend A that data verified and recorded on the blockchain. If A sends that 1 Bitcoin to B then it is also recorded on the blockchain and it goes on and on with every transaction.
Keeping and managing those huge transactions records, blockchain is the best and durable technology available because it is not run in a single host.
Blockchain Can Prevent Frauds.
The main purpose of blockchain usage in cryptocurrencies is to prevent fraudulent activities.
No one is trustworthy in this world, and cryptocurrencies have a decentralized network that means anyone can enter or exit.
This kind of open system leads to many vulnerabilities, like double spending of a coin, hacking and many fraudulent activities.
With cryptography, these major problems can be prevented, that’s why blockchain is very helpful in cryptocurrencies because it uses cryptography to make a sure that every transaction is correctly done in the network.
Blockchain Can Able to Handle Transaction Settlement Faster.
There are more than 275,000 transactions made in a Bitcoin network daily!.
More than 5 billion dollars are transacted in Bitcoin network daily!.
You can imagine how big Bitcoin network is and these kinds of a big and growing network cannot be handled easily by centralized data centers.
The blockchain is distributed and works 24 hours a day, it has no downtime issues no errors and at the same time, it is fast to handle huge volumes of data.
One Last Word.
Without blockchain, we cannot imagine the cryptocurrencies.
And blockchain is giving the power to everyone to look after the network, that means everyone is an owner of the network.
By giving the power to everyone in a system it leads to less unethical practices and less management required to maintain the system.
That’s why the system runs smoothly and correctly.
This does not mean blockchain is perfect from every side, it has its own limitations.
But it is perfect technology that fits into cryptocurrencies and makes crypto what it is today.
The last thing is don’t scratch your head to find out the solution for riddle let it go…
Above are some points that I noticed why blockchain plays an important role in cryptocurrencies.
If you think something can be added to this post then feel free to mentions that in comments.