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The knack of embracing new technology trends quickly and the urge to bring something extraordinary out of the box solutions sometimes become taxing for the enterprises. But will that keep those enterprises safe from their competitors? Well, the answer is no!
But what concerns enterprises from adopting new technology is their dearth of information, their way of functioning, and how it can make a difference to their businesses. One such dilemma is to whether continue with Traditional Database management systems or adopt the new technology of Blockchain to leverage its potential.
So, here in this article of Blockchain vs Database, we will be spilling the facts about both the technologies, how they can be leveraged, and discuss their potential use cases.
Blockchain is a Distributed Ledger Technology (DLT) that allows a set of users to work together in creating a unified decentralized network. These users can communicate with each other to share information or data with the aid of the consensus algorithm. The central governing authority is absent in the Blockchain to make the whole network trustworthy.
Well, when we talk technically the term will be, Blockchain is a growing list of records, called blocks, that are linked using cryptography and each block refers to the previous block, where together they make the Blockchain. There is various validation mechanism like Proof-of-Work (PoW), Proof-of-History (PoH) are present, those are used to validate the work, as it ensures that no invalid transactions are passed into the Blockchain network. Blocks are the most important part here as they are used to store transactions and other important information that is required to operate the Blockchain successfully.
Further timestamps are created to ensure that each transaction can be traced easily, backed, and verified by any participant on the network. This whole system works to add value and brings in transparency, immutability, and security.
Blockchain is not just some other random technology but also the next generation of the tech revolution that has found varied applications in day to life. Blockchain is one of the emerging technologies to make inroads into various sectors due to its numerous important factors and it is one of the most promising technology to revolutionize the world.
The Traditional Database is a centralized ledger that is run by an administrator and they inhibit some of those unique features along with regular read and write features. In the traditional database, the parties having proper access can read and write.
A Traditional Database can be modified, managed, and controlled by an administrator, who is known as DB Admin and has complete control of the database. Various functions like optimizing database performance and managing its size to more manageable levels can be performed by the administrator. Generally, admins run optimization methods to improve performance as a large database tends to get slow in terms of performance.
As of lately, there have been rumors about Blockchain Database, but do Blockchain databases really exist or its just a database? Well to answer this you have to go back and think that Blockchains appear quite sophisticated and complex, but in actuality, they are not. As Blockchain appears to like databases structurally but in functionality, they are totally different. In Blockchains the blocks are all important as they are data structures called blocks, who store data in them. While in a database the information gets stored using tables of data structure.
It is worth noting that, every Blockchain can be considered as a database, but not every database can be considered as a Blockchain. So, a Blockchain database does exist in form of Blockchain Data Structure.
Initially, Traditional Databases worked as flat-file hierarchical systems that provided digital storage for simple information gathering. With further time the databases allowed more complex ways of gathering data by relating information from multiple databases, which incorporated and leveraged a relational model.
The stored data can be queried from the Database by using a special querying language known as Structured Query Language (SQL). In modern times a database can work with almost every type of data structures and can be found to support all modern enterprises where it is scaled to support millions of records.
Blockchain is decentralized in nature, as it allows different parties to share information with each other without requiring a central administrator. In Blockchain the consensus mechanism plays a major role, whereas in Databases the case is completely different. In Database the central administrator is needed as here the consensus system is not present. The basic intellect of one individual admin works in the Database in the place of combined intellects of a zillion individuals plays the role in Blockchain technology.
In the case of Traditional Databases, it is worth noting that they record only the present information, they become useless when you try to track information that was previously recorded. Well for the Blockchains it’s quite different as they not only keep the updated information but also they keep the information about the transactions that date back to the time. Blockchains grow like ever-increasing archives of their own history, where they can create databases that have histories of themselves.
In terms of performance, it is known that Blockchains are already used as systems of records and when you use them as a transaction platform they tend to become slow. Compared to them Databases have been offering almost the same functions with much faster speeds and they have been around for decades. Databases have seen their speeds surging in multiples, but as of now Blockchains too are having their share of improvements in the technology to compete.
The Blockchain that is permissioned is somewhat like a centralized database, which can be both write and read-controlled, but in that case, the confidentiality, centralized Database wins the race
Centralized Databases can be customized by the administrator as per the business requirements. These Databases can be merged to the master database for queries and reports or further they can be distributed. Their features are robust when developers go for app development to give a better and friendlier user experience to the users.
A Database when managed efficiently can handle large volumes of data and process thousands of transactions per second. Since they are permissioned, they are fast as granting access to write operations only to a select few, and the data is recorded to a few servers in form of data structures. When the same information is sought, it can be made available to umpteen users. If a powerful server is made available, it can process data at the backend while a frontend host provides an interface, and speed can be configured by hardware using RAID Level 1 or through sharding and shrinking, which are other techniques. Further, the matters of security and full management of the system are taken care off by the administrator, who can retrieve data in case some disaster happens.
Both volume and speed are well-taken care off in the Database in form of data structures. As of now the Database management system are well designed to sustain the load and are suited for critical enterprise operations.
One of the best features of Blockchain technology is that they are decentralized and this makes them highly resistant to a fault. In Blockchain the crashing of a single node won’t affect the functionality of the network as a whole as there are other nodes present to run the Blockchain. This feature of decentralization works wonders in the case of security, as the information stored on one computer must be copied to all nodes in the network. In short, a hacker would need to hack all the nodes to alter the information to manipulate data. Now this serves as a good safeguard in deterring attacks against the system and a deterrent for the hacker.
Any data stored over Blockchain is immutable, as it can’t be changed once a block has been validated. In short, they are resistant to any sort of tampering and manipulation because the information is recorded on a digital public ledger stored on many nodes. Now to change the information the hacker needs to change that information in all the nodes on the network, which is practically not viable.
Transparency is another key benefit that Blockchain offers, as everything is recorded here and Blockchain is free from censorship. Information over Blockchain cannot be hidden as it’s a distributed ledger system, therefore this fosters more trust and adds value to the system. Blockchain technology, in general, is permissionless, therefore to use Blockchain there is no restriction and it is an open platform for all in a public environment.
The usage of advanced cryptographic methods over a distributed decentralized network makes Blockchain a secure environment. As mentioned above any sort of modification of the data structure in the network requires expending plenty of compute resources. The complete modification of data over all the nodes is also not practical, so hacking seems uneconomical. Due to the nature of Blockchain, the rogue miners and hackers do not get any fruitful results.
Database system is well suited for operations in enterprises, as they are well proven their user friendly to users and have many supported management systems for administrators and developers. The Database backed systems are also used by the fortune 500 companies to make run their high-end systems dealing with large volumes of data. A system that intends to deal with a high volume of traffic like in the retail industry or stock markets is ideally suited to operate upon a database.
A Database does not need to interact with other nodes like a Blockchain-based system nor does it needs to encrypt or hash every piece of data it stores. Databases store unencrypted information as encryption adds a lot of overhead in a live database, but in the traditional database being permissioned is a security feature where encryption happens for an archived database.
Active monitoring and sensor processes, where data gets updated continuously
Instant online transactions
Confidential information records
Those data processing mechanisms that require fast updates
Simple data that do not require verification
Relational data
Standalone applications for plain data storage
The basic qualities of Blockchain technology are to establish trust and transparency, as being a public ledger system it allows access of everyone for the information. Blockchain proves its worth in places like where there is a need for validating information as in the case of B2B Business-to-Business transactions related to supply chain, distribution, and inventory. Blockchain can help when there is a need to track and prevent fraud.
Another thing is that Blockchains are non-relational as different types of Blockchains can’t be joined to relate the data in them together. Therefore, two different Blockchain platforms can’t operate together and when information needs to be relational a blockchain will not be suitable for it. Recently there are some new Blockchain platforms that allow interoperability, those can be in both private and permissioned environments and sometimes integrated with traditional databases to form a hybrid system.
Smart Contracts are an important feature in Blockchain that are used as triggers to execute code to process a transaction, which is much similar to stored procedures in the Database. Smart Contracts are used differently by different platforms like Ethereum uses a smart contract executed as bytecode on all nodes in the network. While the platforms like EOS and NEO use Blockchain as a platform for their Smart Contract ecosystem this is a real use case of how Blockchains can be used differently from traditional Databases.
Financial transactions Transfer of value
Verify data for trustworthiness like Identity, Credibility, Integrity, etc.
Voting mechanism
Authorization works
Decentralized Apps (dApps)
Well, in the choice of Blockchain Vs Database, to pick out your next data storage technology is not that tedious, as we have discussed the qualities of each along with the differences.
Both Blockchain and Database are winners in their respective areas as both of them have their inherent qualities where they both outshine each other. The Database steals the show in terms of utility, speed, and accuracy, while Blockchain aces in terms of innovation, verification, and automation.
In terms of works where fast execution is needed Blockchain must be avoided, as Blockchain introduces a performance penalty because of its verification method. In this scenario, Databases are great, as the critical business process needs to be supported or scaled at the same time. To work with a general-purpose application, databases are far more desirable as the read and write process in Blockchain is not that simple.
Choose Blockchain technology if you are really looking for data integrity, trust, transparency, and verification at stringent levels, as the basic nature of that technology. It’s not that one is better than the other, but here both are better in their perspective. What matters is how you want your data to be executed and what you want to achieve from it.
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