DIGIVESTASI - In the digital age, investment trends are growing rapidly and are supported by a variety of sophisticated new technologies. A popular digital investment among the general public is crypto investment. If you're looking to get into digital investing, you've probably heard discussions about Bitcoin investing. Therefore, some people may be confused about the difference between virtual currencies and Bitcoin.

It is important to understand the difference between these terms before investing. Don't get confused again. Read the following article to understand the difference between cryptocurrency and Bitcoin.

Difference between virtual currency and Bitcoin

According to Tax2win, a cryptocurrency is a digital currency used for transactions over a computer network. Cryptocurrencies do not have a physical form like traditional currencies. In addition, cryptocurrency transactions do not rely on a central authority such as a bank or government.

If so, how is it different from Bitcoin? Bitcoin is one type of cryptocurrency. According to NerdWallet, Bitcoin was introduced as the first cryptocurrency by Satoshi Nakamoto in 2008. Bitcoin is currently one of the most popular cryptocurrencies and has influenced the creation of other cryptocurrencies.

How Bitcoin works

If you want to invest in Bitcoin or any other cryptocurrency, it's important to know how it works.

1. Use of blockchain 
Bitcoin runs on the blockchain, an open-source code that collects the history of all Bitcoin transactions. This transaction history is organized in interconnected blocks to avoid tampering. 
The blockchain is visible to all users, so the entire transaction history is permanently recorded. 

2. There are private keys and public keys 
According to Ledger, all cryptocurrency wallets, including Bitcoin, have a private key and a public key. The private key is the foundation of any blockchain account and is required for all blockchain-related needs. If someone has a private key, they have access to the blockchain that stores their crypto assets. 
The public key is now visible to all users on the blockchain network. The public key acts as a unique identifier, similar to an account number. 

3. Check with Bitcoin mining  
Verification of transactions is done through a process called mining. Mining uses complex encryption procedures to prevent counterfeiting and theft. Miners can receive Bitcoin as a reward for successful mining. 

Types of virtual currencies other than Bitcoin 
Earlier we explained that Bitcoin was the first cryptocurrency and influenced the emergence of other cryptocurrencies. If investors are interested in investing in cryptocurrencies, apart from Bitcoin there are also various cryptocurrencies that are commonly used in Indonesia.

1. Ether 
Ether or ETH is a cryptocurrency that uses a blockchain called Ethereum. According to the website of internet banking company N26, Ether has no limit. This means that, in theory, there is no limit to the number of Ether coins that can be created. Unlike Bitcoin, which has a limit of 21 million coins. According to Google Finance, 1 ETH is currently (April 1, 2024) worth about $3,500. 

2. Solana 
SOL is a cryptocurrency that runs on the Solana blockchain. Solana is more powerful as it can perform 50,000 transactions per second. According to Coin Gecko, 1 SOL is currently (April 1, 2024) worth $198 or Rp3.1 million. 

3. US dollar coin 
USD Coin or USDC is a type of stablecoin, a cryptocurrency whose value is based on an external reference to reduce volatility. 

The value of USD coin is based on the US dollar. Therefore, 1 USD coin is equivalent to 1 US dollar or approximately IDR 15,800 (as of April 1, 2024). This is the difference between virtual currency and Bitcoin. For beginners, there is no need to be confused anymore, right? Crypto is a broad term that includes all digital currencies used in transactions, but Bitcoin is one type of crypto.
 

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