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27. Blockchain versus databases: key differences!

Blockchain and regular databases are two different approaches to storing and managing information. Both have their place in today’s world of technology, but there are a few key differences between the two. In today’s lesson, we will look at these differences to further understand what makes blockchain different from basic databases.

Blockchain and databases – summary definitions

Before going into the details, let’s look at the basic definitions of both terms.

Blockchain is a distributed and unalterable registry that stores transactions and data in blocks linked in a chain. Each block contains a set of transactions and is securely linked to the previous and next block. The Blockchain uses an algorithm consensus to confirm and validate transactions, and data once entered the blockchain cannot be changed.

A database is a data storage and management system that runs on a single computer or server. Data in a database is stored in tables and can be easily modified or deleted by authorised users.

Blockchain technology vs. traditional databases

Their main difference is mainly centralisation. In databases, every record is centralised. With blockchain, it is each participant in the network that has a copy of all records (data) and literally all changes. In this way, every participant has access to them and can see the origin of this data. The blockchain technology is unique in that in its case, it will immediately identify all unreliable information.

Another difference will be the historical record. In the case of databases, they only record current information. They do not record the data that has registered before. As you know, in the case of blockchain technology the case is completely different. Blockchain not only stores information that is recorded in real time, but also allows us to see its history. In practice, blockchains can create these databases that have their own history.

Another important aspect that distinguishes blockchain from databases is performance. Unfortunately, blockchains, despite their many advantages, are less efficient than classic databases. Surely, with the development and widespread adoption of blockchain technology, their performance will improve, but we will probably have to wait for that.

A final key issue is confidentiality. Here, too, databases trump blockchain. It is the centralised databases that can be fully controlled in terms of writing and reading. Blockchain unfortunately does not. When you think deeper, that’s basically what it was created for, too. However, if confidentiality is your goal, consider using a traditional database in this case.

What else do you need to know about blockchain technology and databases?

The above paragraph is the basic differences that exist between blockchain and databases. However, it is worth noting at this point that any blockchain can be considered a database, but vice versa is not.

Databases at the very beginning were designed to store simple, digital information. With their widespread adoption, they began to use a relational model, which enabled ways to store more complex information and data. Databases can be modified, managed, updated and above all – controlled by administrators. So we are dealing with central control. The administrator has the power to create, modify and even delete any records in the database. What is more, they are also in charge of optimising the databases and their size.

In the case of blockchain, we have no, central control. Once added to a block, the information is permanent – it cannot be removed. No one controls the information that is put into the bases on the blockchain. All participants in a given network have influence over it and are responsible for how the base is maintained and updated. Thanks to this ability to store data securely, transparently and tamper-proof, databases built on blockchain are gaining popularity. Let’s remember that blockchain technology is not just for cryptocurrencies, but for managing banking, real estate, supply chain or much, much more.

Summary

Blockchain and regular databases are two different tools that are used in different areas. Blockchain is distinguished by its distributed nature, immutability of data and applications such as cryptocurrencies.

Ordinary databases are more flexible and suitable for traditional applications such as corporate data management. The choice between the two depends on the specific use case and the needs of the organisation.

Complete today’s lesson!

  1. What is blockchain, and how does it work?
  2. Examples of the use of blockchain technology.
  3. Is blockchain secure?

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