Difference between Blockchain and Database

What is Blockchain Database?

If we consider all that we have learned about blockchains so far, we can say that blockchains are quite sophisticated and complex. However, at the bottom line, they are not that complex. They are just like databases but are structurally and functionally different. While databases store data using ‘table’ data structures, blockchains store data in blocks. So, what makes blockchains different from data structures?

The answer is simple. To have a clear understanding, try to comprehend the following picture.

Structural Difference between a Database and a Blockchain.

Is Blockchain Database Unreal? While traditional databases are centralized, blockchains are not. They are decentralized.

Every blockchain may be considered a database, but every database cannot be considered as a blockchain. Here’s why.

Databases first started as flat-file hierarchical systems that provided digital storage for simple information gathering. In due course of time, databases incorporated and leveraged a relational model that allowed more complex ways of gathering data by relating information from multiple databases.

A database can be modified, managed, updated, and controlled by a single user called an administrator. This is where the central control comes in. A database always has an Administrator who has complete control over it. The administrator can create, delete, modify, and change any record which is stored in the database.

Admins can also perform administration on the database such as performance optimization and molding the size of the database to more manageable levels. A large database generally tends to slow down the performance index, so admins run optimization methods to improve the performance of the database.

A database also is recursive, meaning that if you want to go back to repeat a task on a record and modify or delete it and if you have the authority to do so, then you can do it. Admins often remove old records from a database that are backed up or have been deemed as containing obsolete and useless information.

A blockchain database is a type of digital ledger that is distributed across a network of computers. Each block in the chain contains a record of multiple transactions and a unique cryptographic signature that verifies the validity of the transactions in that block. Once a block is added to the chain, it cannot be altered or deleted, ensuring the integrity of the data stored in the database.

Unlike traditional databases that are centrally controlled and maintained, a blockchain database is decentralized, meaning there is no single entity that controls the database. Instead, all participants in the network have a copy of the database, and every participant has a say in how the database is maintained and updated.

Blockchain technology has gained popularity due to its ability to provide secure, transparent, and tamper-proof data storage and transfer. Blockchain applications include cryptocurrency transactions, supply chain management, voting systems, and more.

While a traditional database is centralized, a blockchain function differently. A blockchain stores information in blocks that are uniform in size. Each block contains the hashed information or hash code from the previous block to provide cryptographic security. Unlike databases, this added security feature engrossed within blockchains makes them extremely difficult to hack and tamper.

The hashing in blockchain uses an SHA-256 mechanism which is predominantly a one-way hash function. The hashed information is the data and digital signature from the previous block and the hashes of previous blocks that go all the way back to the very first block or the genesis block in the blockchain. That information is run through a hash function that further points to the address of the next block.
PS: Remember linked lists? Blocks in a blockchain are connected in the same manner as nodes are connected in a linked list.

The main differences between blockchain and database are listed in the table below.

Difference between Blockchain and Database

• Decentralized Control: Generally, blockchains allow different parties to share information with each other without requiring a central administrator. The consensus mechanism that we discussed earlier plays a big role in decision-making in the case of blockchains. Although, databases have completely different usability. A central administration is required in a database as certain situations arise where you cannot depend on a consensus. Sometimes, the basic intellect of one individual may turn out to be better than the combined intellects of a zillion other individuals.
• History of Itself: Centralized databases record present information only. They do not trace information that was previously recorded. With blockchains, the case is different. They not only keep information that is relevant in real-time but also can trace back information of transactions that have come before. Blockchains can create databases that have histories of themselves, i.e., they grow like ever-expanding archives of their own history.
• Performance: While blockchains are used as systems of records and are ideal as transaction platforms, they are considered as slow as databases when considered for digital transaction technology. There will certainly be improvements to the performance and nature of blockchain technology, no doubt, but databases are offering the same anyway. They have been around for decades and have witnessed their performance surge in multi-folds.
• Confidentiality: A permissioned blockchain, like a centralized database, can be both write and read-controlled. But, if confidentiality is the only goal, blockchains have no advantage over centralized databases.

In summary, while every blockchain is a database, not every database can be considered a blockchain due to the unique features and characteristics that make blockchain technology a secure, decentralized, and tamper-proof way to store and transfer data.