Understanding the relationship between cryptocurrencies and blockchain technology is essential for anyone venturing into the digital asset space. While the terms are often used interchangeably, they represent distinct concepts. Not every cryptocurrency operates on its own dedicated blockchain.
Table of contents
Cryptocurrencies and Blockchains: A Closer Look
A blockchain is a distributed, decentralized, public ledger that records transactions across many computers. It’s the underlying technology that enables cryptocurrencies like Bitcoin to function without a central authority. Bitcoin, as the first cryptocurrency, indeed operates on its own blockchain.
Altcoins and Their Dependence on Existing Blockchains
Many cryptocurrencies, often referred to as altcoins (alternatives to Bitcoin), are built on existing blockchains. Ethereum, for example, provides a platform for developers to create and launch their own tokens and decentralized applications (dApps). These tokens operate on the Ethereum blockchain, sharing its security and infrastructure.
Coins with Independent Blockchains
Some cryptocurrencies, like Bitcoin, Litecoin, and Monero, have their own independent blockchains. These “coins” are designed to function as digital currencies and have their own unique consensus mechanisms and governance models.
Tokens vs. Coins
It’s crucial to distinguish between coins and tokens. Coins have their own blockchain. Tokens, on the other hand, are created on top of an existing blockchain. They often represent utility or access within a specific project or platform.
Examples of Cryptocurrencies with and without Their Own Blockchains
- Own Blockchain: Bitcoin, Litecoin, Dogecoin
- Built on Existing Blockchain (e.g., Ethereum): Many ERC-20 tokens
сегодня
