Blockchain vs Traditional Database: What Should be a Startup’s Choice

Blockchain vs Database has become a hot topic for debate amongst the tech world lately. The entire world has taken a spin with the introduction of cryptography and blockchain. With the distributed ledger technology being initiated and implemented, the entire paradigm of recordkeeping and data storage has changed. Though Blockchain and Database are quite different, often they are still used interchangeably.  In this article, we would like to shed some light on both segments and see how and where they are different. 

A blockchain is a growing list of records, called blocks, that are linked by cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Data change is not allowed here due to the design. It enables decentralization. controls and eliminates the risks of data changes by third parties with sufficient access to the system.   

On the contrary, a database is a data structure used to store information. It is an organized collection or storage of data that can store new data or access existing data. The data stored in a database can be arranged with a database management system. It enables the independent operation of networks and makes central control superfluous. A completely centralized approach to manage, monitor, access, and maintain the data. 

What is Database?

Database in simple terms can be referred to as the central ledger technology which is used to store and access the data as per the need. A central administrator, (often known as a database administrator) has complete access to read, write, delete and update any information from the database. It is being the traditional medium for organizations so far to store a massive amount of data. 

Take a look at the following image for a better understanding:

This works in a completely centralized network where a trusted authority or command stays on top of the control and any request for data access in any form can only be done when the user is verified and authenticated by the central authority. 

Advantages:

Stability: One of the biggest advantages that a database holds is uncompromising stability. Its sheer stability comes with the tolerance power for a heavy volume of transactions per second. With the central repository and control, the need for nodes is replaced and it can withstand any volume of data at any given point of time giving the organizations a sense of relief. 

Speed: Though in the past, there had been a few complaints about the speed, but now the database has improved and enhanced its performance over the years. Big Data is the living proof for proving the case in point. 

Customization: Customization is one hands-on benefit leveraged by users of the database. The reason being, as everything is managed centrally, taking a decision on any customization is extremely easy compared to the blockchain where there is no owner as such. Also moving the data from one location to another is quite easy due to relational architecture. 

Backup: In case of any natural disasters or calamity, automatic data backup provision is there. The database provides imminent backup and recovery subsystems. 

Multi-user Interface: Database stands apart in this arena completely as it is extremely user-friendly when it comes to different and multiple user interfaces – such as application program interfaces and graphical user interfaces. 

What is Blockchain?

Blockchain is a distributed ledger technology (DLT) that stores information in a data structure known as blocks. It is a ledger that enables peers to store blocks of information that are grouped in uniform size and distributed to a set of computers of separate entities.  

In other words, a blockchain is a decentralized network that contains information about all events and transactions pushed into it, and the data stored on the network is verified by all other users available on the network. This makes blockchain the very definition of a democratized system as it uses a peer-to-peer architecture (P2P). 

A blockchain data structure is an excellent example of a Merkle tree that is used as an efficient method of validating data. Once a block has been added to blockchains, the information is immutable and transparent to everyone.

Advantages:

Blockchain has brought a revolution in the modern world. It is leveraged due to: 

Time-Saving: One of the biggest attractions of blockchain in the financial industry is that it helps to drastically reduce the time to send or receive money from anywhere in the world.  Sending money through traditional banking is a long painful process. In this case, any transactions can be completed almost in the blink of an eye.  

Transparency:  Blockchain is an open ledger that allows anyone to view and review transactions without the help of an intermediary, which helps build trust in the system. 

Security:  Blockchain uses advanced cryptography to ensure that information is locked in the chain. Every block on the network also has the hash of the previous block, which makes it tamper-proof. It provides a copy of the original chain to each user on the network so that the system remains active even if many nodes fail.   

Immutable Transactions: Any transaction recorded on a blockchain is final and cannot be changed. This means when a new block is added to the chain; it cannot be changed or deleted.   

Versatility: Contrary to popular belief, a blockchain isn’t necessarily accessible to everyone. There are different types of blockchain: private, public, and hybrid. In this way, companies can decide which type of blockchain suits their overall goal.   

Reduction of Costs: A decentralized network of nodes means companies can reduce their budget on expenses such as hosting, security, maintenance, IT staff, infrastructure overhead, and more. 

Decentralized: There is no single authority overseeing the network, which means there are no intermediaries or administrators. Everyone in the system is the same and the network has standard rules for how each node exchanges blockchain information.

Blockchain vs database: Overall comparison

Factors	Blockchain	Database
Security	Blockchain is known for utilizing high-level cryptographic technology and a shared decentralized network. Changing a block requires a list of lengthy processes and permissions to carry out.	Database, as being managed by a centralized authority, is quite prone to attacks and the nature of security patches and steps taken by the administrator. In case that is neglected, then it can easily become a security issue.
Cost	Transaction fees are quite higher compared to the traditional database due to the high miner’s cost.	Database costs are quite standard and have become cheaper over the years due to advancements in technology and wide usage.
customization	Blockchain can be really hard to make any customization once the proof of work is prepared. As it is completely distributed, making any change or customization requires a plethora of permissions.	User-friendliness and customization is strong suit for database. It can be customized by the controller depending upon the required interface.
Architecture	Blockchain uses a distributed ledger network architecture. It is a peer-enabled network in which each peer can connect to another using secure cryptographic protocols. Since there is no centralized node, the nodes can jointly participate in the consensus algorithm.	A database is based on a client/server-based centralized architecture. It\’s a hugely successful architecture that can work in both small and large environments. Here the client is the recipient, while the servers act as the central processing unit. between the client and the servers are maintained over a secure connection.
Data Management	Blockchain works differently when it comes to data storage. Blockchain supports immutability, which means that data are once written cannot be erased or replaced. Immutability means that the data cannot be changed within the network. Blockchain only supports two operations, read and write:  Read: To read or retrieve data from the blockchain network  Write: To add information and data to the blockchain network	In a traditional database, data can be easily stored and retrieved. To keep the application working properly, CRUD is used at the primary level.  CRUD stands for Create, Read, Update and Delete. This also means that the data can be deleted if necessary and replaced with new values.
Transparency	In Blockchain, anyone with the right tool can verify the data once it has been written to the public blockchain. Transparency ensures that the public can trust the network. The integrity of the blockchain is made possible by the immutability it has to offer. Once saved, data cannot be damaged or changed in any way.	Databases, on the other hand, do not allow transparency because they are centralized, and users cannot review the information if they so choose. However, an administrator can make a record public, but no person can perform a data review.

Blockchain vs database: Which one to choose? 

Now that we understand some of the key differences between blockchain and databases, it is time to see the best use cases for both.

Use cases for databases

• The best use case for databases is in business solutions or networks. The reason for this is the functioning of the database and the stability of the entire network. Databases are undoubtedly easy to use and are already supported by many popular management systems for developers and administrators. 

Forbes, for example, uses a database in conjunction with high-end systems.  

• Scalability makes databases a good choice for businesses. Systems like exchanges that rely on fast trading should also use databases for better data flow. However, blockchain seems to work very well on corporate networks as well. 
• Another advantage is that the data is stored in a database. It does not need to be checked during the write or read process. makes the database a good choice as it can be profitable, especially when basic bookkeeping is required.  

 In summary, the best use cases for the database are as follows:  

• Applications or systems that use a continuous flow of data. 
• Storage of confidential information 
• On-line transaction processing needs to be fast 
• Applications or systems that do not require data verification. 
• Relational Data 
• Standalone Applications 

Use cases for blockchain

The purpose of blockchain is completely different. It is a peer-to-peer network that creates two important things for its users, namely transparency and trust. The distributed ledger makes it unique. It can change the way an industry works and improve every aspect of it. So, what are the best use cases for blockchain? We will explore.

• Any system that requires proper verification can use blockchain. For example, B2B business-to-business transactions can benefit enormously.  This includes supply chain, inventory management, and sales. The key to this is transparency as it allows companies to track every step without introducing more complexity. 
• Another great blockchain use case is Authorized Networks. Blockchain is also ideal for automating tasks within a platform. Smart contracts are integrated into the Ethereum blockchain, which offers the possibility of using stored procedures. When a certain condition is met, the code will run automatically.  

 In summary, the best use cases for blockchain are the following:  

• Transfer value 
• Storage value 
• Money transactions 
• Trustworthy data verification 
• Voting systems 
• Decentralized applications (dApps)