Did you know that all blockchains are a database but not all database are blockchain? If not already having this confusion, many beginner users are already confused between blockchain and database. Unless you’ve been living under a rock, you would’ve come across the buzzword of recent times, “Blockchain”. However, the blockchain technology is much bigger than it is being used as right now.
If you don’t already know, the most used application of the blockchain technology is the cryptocurrency. Cryptocurrency is the digital money that we can use exactly like the fiat or traditional paper currency. It’s just that you cannot touch it like you can touch paper currency. It’s digital, it’s like the internet. You cannot touch it or see it, just use it. Similarly, cryptocurrency is the digital money that cannot be felt, touched or carried anywhere physically. You can simply spend it where ever you want.
In this post, I will be talking about the difference between blockchain and database. To brief you, blockchain is a distributed database that contains the data related to cryptocurrency. On the other hand, a database is just collection of structured data.
Let’s explore the difference in detail in subsequent sections 😎
What is Blockchain?
For some reason, if you cannot watch the video, here’s what blockchain means. Aforementioned definition of blockchain is the best one you can remember to understand it.
A blockchain is a distributed database of cryptocurrency data.
To break the ice for you, blockchain is a DLT, Distributed Ledger Technology that came into existence in 2009. When Satoshi Nakamoto released an anonymous whitepaper on peer-to-peer digital currency system, Bitcoin.
At the heart of Bitcoin, lies the blockchain technology
Basically, blockchain technology enables a connection between the two parties who have never met before. They don’t have to trust each other for exchanging funds between the two. While on this platform, trust is secondary. The primary source is your wallet address.
The blockchain is called a blockchain because it contains blocks of verified cryptocurrency transactions. Each block is appended to the previous block, hence forming a chain of blocks. Which further becomes blockchain. Each block/node is decentralized and is responsible for the administration of the blockchain.
There’s more to this…
All previously verified nodes participate in verifying the new nodes by reaching certain consensus. This consensus makes sure that the security of the system is taken care of. You can say that these consensuses are the middlemen who do not charge anything for the security of your details.
A consensus is nothing but mining that users do to verify new nodes and produce new cryptocurrency as a result.
It’s important to note that the speed of block addition varies from cryptocurrency to cryptocurrency. Every 10 minutes a new bitcoin block join the queue of verification whereas an ether block joins the queue every 30 seconds on average.
The blockchain has records from the very beginning to the latest record. This makes the decentralized ledger technology a lot more transparent and manageable. That being said, take a look at the first block ever. It’s the very first transaction made of 50 BTC.
The biggest benchmark this DLT has brought is that it has removed middlemen that used to charge a hell of a money.
Finally, blockchain architecture is made to let everyone be a participant in the verification process of cryptocurrency. Anyone can participate in writing the ledger records of the blockchain and keep the flow going. People who participate in these activities get monetary benefits as a fraction of Bitcoin as a reward.
What is a Database?
The database is simply a collection of data which a database admin administers. Database do not have decentralizing nature like blockchain, at least not worldwide and not always. Furthermore, a database administrator can choose the users who write or read the data in the database. Whereas in case of a blockchain, anyone in the world can manage/edit/update it.
The centralized nature of databases makes it easier to handle and produce a higher output. This visibility and transparency bring two major problems:
- It becomes single point attack system. That is, attackers find it easy to attack such systems with single point access.
- You have the risk of trusting the administrator with your personal financial details. In case of an attack, there’s a definite chance of exposing personal data to attackers. In other words, people attack systems to steal data from the systems.
With a blockchain, double spending is easily controllable. Which in case of traditional currency system becomes a challenging task to do.
Final thoughts on blockchain and database
To conclude, here’s a tabulated summary of the major difference between the blockchain and database.
Sure, the traditional database system in the financial bodies is a great way to keep up with the pace of this ever-changing world. While hacking being a common practice these days, you can think of the loss we all would face in such a system which has a single point of failure.
If trust and robustness weren’t mandatory, the blockchain technology wouldn’t have even came into existence. In other words, the blockchain technology provides these two elements without charging a single penny. This is the reason blockchain is not going to disappear from the face of the internet.
Among all the security attacks on cryptocurrency platforms, blockchain technology is in a gray zone in many nations. Privacy/Security is an element that comes at a cost of a lot of improvisations. We will have to wait until the day when transparency of blockchain doesn’t feed the ill mentality of people misusing it.
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