Blockchain v/s Database: Perceiving the Difference

April 20, 2024

In today’s tech world, blockchain technology is gaining much popularity and often compared with database technology as they are similar. However, while both cater to a similar system of storing data – the design and the purpose of both of these technologies sets them quite apart. Before we jump in to compare the two, let’s look at what both are in their own right.

Blockchain technology uses a decentralized network system to create a distributed ledger technology that lets a number of people share data and work together. The data is stored and shared in the form of blocks. Comparatively much newer, it uses cryptography to form an evolving list of blocks, each of which are marked by a timestamp to make sure it can be verified by all users later on. Database technology is a centralized database system that stores information and allows access to existing ones. A central authority manages the server and can also modify the data, allowing for different data structures that can be useful for certain kinds of data storage and hierarchical environments.

Both systems are clearly similar in the sense that they store data in one way or the other. However, the difference is in the design of both and their overall purpose. Here is a comparison of both side by side:

Handling Data

Blockchain technology uses straightforward operations like read and write to manage the data that comes through. Database systems use more operations – create, read, update, and delete (CRUD) to handle the data that is being stored. These operations are managed by the central administrator.

Architecture

Perhaps one of the biggest and obvious differences in both the systems is that of architecture. Blockchain uses a distributed ledger network that works very well for a peer system. In contrast, database technology serves a client-server architecture making it very useful for systems that require a central authority.

Authority

The blockchain technology is famous for its decentralized system that allows for easy peer sharing and increased security whereas the database system has a central administrator that manages a whole data structure and can also delegate certain functions in a hierarchy if required. This is where the difference between the two should be analysed as it is not about whether one is better or the other but what one’s requirement is and which one caters better to their work and goals.

Price

Blockchain technology, comparatively new as it is, is financially harder to access and maintain. Database technology is easy to execute and to maintain as it is older and hence, tried and tested which also makes it easier to access.

Transparency and Security

Blockchain technology, catering to a peer network, is more transparent as all users get access to similar features and functions. In addition, users of blockchain technology cannot modify stored data. All of this lower security risks making blockchain technology a favourite for people looking for more security. Although this is only for public blockchains. In contrast, a database system has one central authority who assigns and delegates functions and features to different levels of users. The central administrator also has access to modifying data and is responsible for taking backups – all of this increasing security risks and decreasing transparency.

Performance

In terms of the speed and how fast and efficiently a system performs, database technology comes out as a clear winner as its system is straightforward which makes it extremely scalable. Blockchain technology is slower in comparison as it needs to engage in consensus and verification methods.

Now that the difference is evident, the ultimate choice for you lies in which purpose and design is better suited for your company and its projects.