Did you know that blockchain and database are different things? Many people think of blockchain as similar to a database, but it is much more than that.
Of course, blockchain is a form of database, distributed database. I think some people might be curious if you say ‘distributed’ and ‘database’ together.
Let’s keep that curiosity going because today we will highlight the differences and similarities between databases and blockchain.
What is blockchain?
Blockchain is a distributed database or ledger.
It is a DLT or distributed ledger technology that the world had not seen before Satoshi Nakamoto created Bitcoin and introduced it to us in 2009.
The underlying technology of Bitcoin is ‘blockchain’.
CoinSutra has discussed blockchain in detail in the past. The ultimate guide to understanding what “blockchain” is and how it works.
However, for those who are new to it, I will briefly introduce it again.
Blockchain is a distributed ledger that can be used between parties that do not trust each other with their data.
Because adding something to the blockchain requires work.
For example, in the Bitcoin blockchain, miners add blocks to the chain every 10 minutes using cryptographic proofs and timestamps. But don’t forget that this process makes the blockchain very slow.
These cryptographic proofs and timestamps, along with proof-of-work, ensure that no one can edit that data without doing a significant amount of work. Additionally, adding transactions with timestamps creates an immutable record that anyone can verify.
Blockchain makes it easy and transparent to verify the provenance of digital records.
As with the Bitcoin blockchain, you can determine when a digital record was created (its origin), ownership of the time-stamped record, and its current status.
On the Bitcoin blockchain, you can actually see where a particular BTC came from, how many times it was traded between different addresses, and which address actually owns that BTC.
of this type Distributed ledger or database It can be very helpful between parties who do not trust each other but want to transact in a fair and non-centralized way.
Lastly, blockchain architecture allows anyone to create digital records on the blockchain by putting in a significant amount of work called proof-of-work, so there is no centralized authority to write to the blockchain.
What is a database?
A database is a type of central ledger that administrators trust to manage well.
Of course, unlike blockchains, which can be read by anyone by doing a significant amount of work in the right way, database administrators provide read or write permissions.
However, like blockchains, modern databases can store records and multiple versions of data, but with the help of a somewhat centralized, trusted entity.
And because it is centralized, maintenance is easy and production is high. However, this also brings the disadvantage of trusting a centralized entity that, if compromised, can compromise the entire data and even change ownership of digital records.
Additionally, there is no need to keep all previous versions of the ledger, since we all fundamentally trust centralized authorities and must act fairly. In the real world, this is far from reality.
These systems make it easy for digital records to be pirated and cannot solve problems such as double spending.
Conclusion: Blockchain vs. Database
| blockchain | database |
| No one is a manager or person in charge. | The database has administrators and centralized control. |
| Anyone can access the (public) blockchain. | Only authorized entities can access the database. |
| Anyone with the right proof of work can write to the blockchain. | Only entities with read or write permission can do so. |
| Blockchain is slow | database is fast |
| Record History and Ownership of Digital Records | No history and no ownership of digital records |
I don’t want to emphasize the message that centralized traditional databases are useless or bad. Instead, I want to show that both types of ledgers can be used for different purposes.
For example, ‘blockchain’ can be used wherever provenance and immutability are required. If you need high performance and confidentiality, you can use an existing database.
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About Harsh Agrawal:
Award-winning blogger with over 15 years of experience. He has a background in finance and technology and holds a bachelor’s degree in information technology and engineering.
He is an international speaker and author who believes in the future of blockchain and its application in the cryptocurrency world.
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expertise:
Harsh has over 15 years of experience in fintech and 7 years of experience in blockchain and Bitcoin. He has also moderated blockchain expert panels and attended international blockchain events such as BTCMiami, Mainnet Messari, and Token2049.