Though blockchain and cryptocurrencies are terms used synonymously, they differ greatly. Cryptocurrencies are digital currencies that use blockchain technology to store records of cryptocurrency transactions. In contrast, blockchains have an array of functions beyond cryptocurrencies–such as holding medical data, supply chain logistics information, and financial records.

A blockchain is a collection of records, similar to a spreadsheet, that acts as an electronic database. The information stored in a blockchain, unlike a typical spreadsheet, is larger. These blocks are divided among many computers or a “distributed ledger.” When each block reaches its storage capacity limit, it is “chained” to the previous one and creates a new block.

Cryptocurrencies function similarly to regular currency, but they exist only digitally and have a market value. These types of money can also be stored and reused just like gold. The world’s first cryptocurrency was Bitcoin, which introduced blockchain technology to the scene. Other cryptocurrencies followed, including Ethereum with its own blockchains.

Cryptocurrencies don’t exist in the physical world. Instead, they’re digital tokens that use blockchain technology to verify transactions. Blockchains are distributed across a network of computers, so there’s no central data center where information is stored. When someone buys a new bitcoin, it is recorded on the blockchain associated with that currency.

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