Database(s) | Blockchain = Future
One major difference between a typical database and a blockchain is how the data is structured.
A blockchain collects information together in groups, known as blocks, that hold pieces of information. Blocks have limited storage capacities and, when filled, are closed and linked to the previously filled block, this way forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled, and so on.
A database usually structures its data into tables, whereas a blockchain, as its name implies, structures its data into pieces (blocks) that are stitched together. This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled, it is “sealed” and becomes a part of this timeline. Each block in the chain is given an exact time stamp when it is added to the chain.
- A blockchain is a type of shared database that differs from a typical database in the way that it stores information; blockchains store data in blocks that are then linked together via cryptography.
- Decentralized blockchains are immutable, which means that the data entered is irreversible.
- As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order.
- Different types of information can be stored on a blockchain, but the most common use thus far has been as a ledger for transactions.
The goal of blockchain is to allow digital information to be recorded and distributed but never edited. In this way, a blockchain is a foundation for immutable ledgers, or records of transactions that cannot be changed, deleted, or destroyed. This is the reason why blockchains are also known as distributed ledger technology (DLT).
First developed as part of a research project in 1991, the blockchain concept predated its first widespread application in use: Bitcoin, in 2009. In the years since, the use of blockchains has exploded via the creation of multiple cryptocurrencies, decentralised finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts.
Blockchains can hold a variety of other information like legal contracts, state identifications, or a company’s product inventory.
Let’s have a look now at how blockchain technology achieves decentralized security and trust. To begin with, every new block is always stored linearly and chronologically. That is, new blocks are always added at the “end” of the blockchain. After a block has been created to the end of the blockchain, it is extremely difficult to go back and alter the contents of that said block unless a majority of the network has reached a consensus to do so. That’s because each block contains its own hash (#), along with the hash of the block before it, as well as the previously mentioned time stamp. Hash codes are created by a mathematical function that turns digital information into a sequence of numbers and letters. If that information is edited in any way, then the hash code changes as well.
To validate new entries or records to a block, a majority of the decentralized network’s computing power would need to agree to it. To prevent anyone from validating bad transactions, blockchains are secured by a consensus mechanism such as proof of work (PoW) or proof of stake (PoS). These mechanisms allow for agreement even when no single node is in charge.