Can Blockchain Exist Without Cryptocurrencies?

Whenever one starts a conversation about cryptocurrencies, a few things come up in the conversation – what Blockchain does it operate on, and is it secure? Many of the market newbies have a long-standing debate and question about how Blockchain and cryptocurrency are related and whether one can exist without the other.

But with the world already witnessing multiple usage scenarios for blockchain technologies, there is a pertinent question – why are blockchains important and how do they impact our daily lives? To delve deep into the ability or disability to coexist with or without the other, one needs to understand what Blockchain and cryptocurrencies are and how they work.

What is blockchain technology?

Blockchain can be described as a unique network that acts as a distributed ledger that shares nodes in a computer network with each other. As a distributed ledger, Blockchain stores its information in a digital format that is genuinely decentralized.

Blockchain in a crypto ecosystem, often called the engine that powers the cryptocurrencies, ensures fidelity and data security, creating trust without third-party involvement. What separates Blockchain from a typical database is its ability to store data. All critical data is structured so that each block contains a set of information.

Communication between blocks occurs through a peer-to-peer network system instead of a central node. This allows each node to store a separate set of information, which is then passed on to other nodes, forming a chain in the P2P format. This allows the blockchain network to flag any anomalies in case a situation arises where all nodes are not identical.

What are cryptocurrencies?

Now that we have understood the basics of Blockchain, let’s dive deep into what cryptocurrencies are and where Blockchain fits in here. In its simplest form, cryptocurrencies are digital currencies that are secured with cryptography. Being decentralized in nature and operating on blockchain technology, what sets cryptos apart is the fact that a central authority does not issue them.

Bitcoin was the first cryptocurrency developed by Satoshi Nakamoto, and as of today there are over 20,000 cryptos on the market. It is important to understand that while digital currencies can be thought of on one blockchain network, they can also be used on other blockchain networks and are often used as a form of payment in accepted countries.

How blockchains are an integral part of cryptocurrencies

In its simplest form, Blockchain is the underlying technology on which crypto operates. Be it public or private, Blockchain can operate without crypto, but cryptos cannot function without blockchains unless they lack decentralization or are operated by a single entity.

So, cryptos like Bitcoin, Ethereum, etc., since they are permissionless, require a blockchain network to operate on, private cryptos like Hyperledger, Corda, etc. don’t necessarily need a blockchain network to operate on as it creates distributed ledgers to support confidential commercial transactions.

Can Blockchain Exist Without Crypto?

Well, Blockchain today has varied uses, not only in financial transactions, but also in other sectors such as logistics, manufacturing, etc. Countries around the world have begun to realize the potential that blockchain has and why it is important to harness it.

For example, the UK unveiled a detailed strategy in April to harness the power of blockchain technology to ease the process of making payments for customers. Former chancellor Rishi Sunak had stated his intention to make the UK a crypto hub, seen as a leading player in technology adoption.

Even India’s central bank governor Shaktikanta Das stated that while the concept of crypto remains a cause for concern, its underlying technology can exist and grow even without cryptocurrency.

Many experts believe blockchains have more utility in the real world than in the virtual world. Financial institutions can use them to maintain records, land records, etc. With their use, it is expected to improve the efficiency of various departments handling the same and reduce overhead costs.

Conclusion

While Blockchain is a critical element in the cryptocurrency world, the same necessarily applies to the other. Therefore, it not only creates increased traceability of transactions, but also offers a way in which information can be stored, thus allowing individuals and companies to run their business smoothly and without problems.

As the world moves towards unique technologies, blockchains can have a role to play in terms of the feasibility and security aspects it provides. While there are a few, who believe that Blockchain must be used with a floating token, as it reduces third parties and intermediaries. Blockchain use, both with and without crypto, is a viable option for investors to consider.

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