A database is an organized collection and storage of data that is accessible electronically from a computer system. A blockchain is actually a new form of database that is distributed and trustless. Both have similarities but they are not interchangeable. They differ in purpose and design.
Databases are best used for corporate networks due to their speed and stability. Most large corporations like Apple and Amazon use databases to store their data.
Blockchains are meant to be used by different parties that do not trust each other but want to transact with one another, without the need for middlemen. They are mostly used for storing decentralized networks like Bitcoin and other cryptocurrencies, smart contracts, supply chain management, etc.
Databases are centralized; meaning there are administrators who have full control of the data and users are supposed to trust them. This is a central point of failure for database, since there is no way to guarantee that the data they store will be used for the right purpose and not be abused; because an admin could easily tamper with the data.
Another thing to note is that a database uses a client-server architecture, where a host provides storage management services for clients, e.g. Microsoft Azure.
And for what it’s worth, databases are fast and efficient. They are also easy to scale and have served their purpose for a long time.
Blockchains are decentralized; no single entity is in charge, and consequently, no central point of failure.
A blockchain uses peer-to-peer architecture, which distributes data equally to all users of the network. Furthermore, the users support the network with their own resources as well as control the data collectively. As such, blockchain data is immutable, i.e. almost impossible to tamper with.
Unfortunately, these perks have trade-offs. Blockchains are inherently slow and inefficient compared to traditional databases due to the simple fact that the data needs to travel to different locations around the world all the time to achieve what is known as a consensus.
Consensus is a general agreement proving that all the data in the network are valid. The whole process is automated by the different computer devices connecting to the blockchain. A general database doesn’t need consensus because the administrators have special privileges that the average users don’t.
Blockchains are also difficult to scale, e.g. going from a thousand users to a million users, without overloading the network. This is one of the most challenging obstacles this technology is facing today. Fortunately, there are more than enough brilliant people currently building solutions to mitigate or bypass this problem.
Other use-cases include smart contract and supply chain management; basically, any application where multiple parties that don’t trust each other need to transact safely. To put things in perspective, blockchain is only 10 years old so it’s safe to assume that it has not reached its full potential yet.
Blockchain technology is both cutting edge and bleeding edge. Regardless, it has a bright future.
This article originally appeared on BitPinas: Blockchain Vs. Database | Blockchain Philippines Guide