Relationship between Blockchain and Cryptocurrencies

Blockchain is the foundational technology that enables cryptocurrencies. **Key points of the relationship:** 1. **Distributed Ledger** – A blockchain is a decentralized, tamper‑proof ledger that records transactions in blocks linked together. Cryptocurrencies use this ledger to store every transfer of their native tokens. 2. **Consensus Mechanism** – Blockchains rely on consensus algorithms (Proof‑of‑Work, Proof‑of‑Stake, etc.) to agree on the order of transactions. This consensus secures the cryptocurrency’s issuance and prevents double‑spending. 3. **Native Tokens** – Most blockchains have a native cryptocurrency (e.g., BTC on Bitcoin, ETH on Ethereum, SOL on Solana). The token serves as a unit of value, a means of paying transaction fees, and often as a security or governance tool for the network. 4. **Smart Contracts** – Advanced blockchains (Ethereum, BNB Chain, etc.) support programmable contracts. These enable a wide range of crypto assets beyond simple money, such as DeFi tokens, NFTs, and decentralized applications. 5. **Economic Incentives** – Cryptocurrencies reward participants (miners, validators, stakers) for maintaining the blockchain, aligning incentives to keep the network secure and operational. In short, a blockchain provides the immutable, decentralized infrastructure, while a cryptocurrency is the digital asset that lives on top of that infrastructure, using the blockchain’s security and consensus to function as money, a utility token, or a governance token.