What is the Difference Between a Blockchain and a Database?
von Satoshi Nakamoto
As stated in our guide "What is Blockchain Technology?", the difference between a traditional database and a blockchain begins with architecture, or how the technologies are orchestrated.
A database running on the World Wide Web is most often using a client-server network architecture.
A user (client) with permissions associated with their account can change entries that are stored on a centralized server. By changing the 'master copy', whenever a user accesses a database using their computer, they will get the updated version of the database entry. Control of the database remains with administrators, allowing for access and permissions to be maintained be a central authority.
This is not at all the same as with a blockchain.
For a blockchain database, each participant maintains, calculates and updates new entries into the database. All nodes work together to ensure they are all coming to the same conclusions, providing in-built security for the network.
The consequences of this difference is that blockchains are well-suited as a system of record for certain functions, while a centralized database is entirely appropriate for other functions.
Decentralized control
Blockchains allow different parties that do not trust each other to share information without requiring a central administrator. Transactions are processed by a network of users acting as a consensus mechanism so that everyone is creating the same shared system of record simultaneously.
The value of decentralized control is that it eliminates the risks of centralized control. With a centralized database, anybody with sufficient access to that system can destroy or corrupt the data within. This makes users dependent on the administrators.
Some administrators have earned the trust put in them, for the most part. People's money is not stolen by banks that record the money they hold in private databases, for example. And, there is a logical reason why you would want centralized control. Centralized control can be a speciality, a reason for being.
But, that also means those with control, such as a bank, need to spend billions of dollars keeping these centrally held databases from being altered by hackers or anyone else who might wish to profit from another's loss. If the central administrators we're trusting to keep our information secret fail in this regard, then we lose.
History of itself
Most centralized databases keep information that is up-to-date at a particular moment. They more or less are a snapshot of a moment in time.
Blockchain databases are able to keep information that is relevant now, but also all the information that has come before. Blockchain technology can create databases that have histories of themselves. They grow like ever-expanding archives of their own history while also providing a real-time portrait.
It is the expense required to compromise or change these databases that has led people to call a blockchain database immutable. It is also where we can start to see of the evolution of the database into a system of record.
Performance
While blockchains can be used systems of record and are ideal as transaction platforms, they are considered slow as databases when compared to what is possible for digital transaction technology that we see today with Visa and PayPal.
While there will certainly be improvements to this performance, the nature of blockchain technology requires that some speed be sacrificed. The way distributed networks are employed in blockchain technology means they do not share and compound processing power, they each independently service the network, then compare the results of their work with the rest of the network until there is a consensus that something happened.
Centralized databases, on the other hand, have been around for decades, and have seen their performance increase in lock-step with a formula that has come to define innovation in the digital era: Moore's Law.
Confidentiality
Bitcoin is a write-uncontrolled, read-uncontrolled database. That means anyone can write a new block into the chain, and anyone can read a block in the chain.
A permissioned blockchain, like a centralized database, can be write-controlled and read-controlled. That means the network or the protocol can be set up so only permissioned participants can write into the database or read the database.
But, if confidentiality is the only goal, and trust is not an issue, blockchain databases pose no advantage over a centralized database.
Hiding information on a blockchain requires lots of cryptography and a related computational burden for the nodes in the network. There is no way to do this that is more effective than simply hiding the data completely in a private database that does not even require network connectivity.
Think of all the databases Ethan Hunt has broken into in the "Mission: Impossible" series and you can get a sense of the type of confidentiality possible in the private databases.
Authored by Nolan Bauerle; images by Maria Kuznetsov; Coindesk
NEXT: WHAT ARE THE APPLICATIONS AND USE CASES OF BLOCKCHAINS?
INDEX: A BEGINNERS GUIDE TO BITCOIN AND BLOCKCHAIN TECHNOLOGY
What is Bitcoin?
It’s a decentralized digital currency
Why Use Bitcoin?
It’s fast, cheap to use, and secure
How Can I Buy Bitcoin?
From an exchange or an individual
How to Buy Bitcoin in the UK
Buying bitcoin in the UK
How to Store Your Bitcoin
Use a digital or paper wallet
What Can You Buy with Bitcoin?
Spend your bitcoins
How to Sell Bitcoin
A guide on how to sell your bitcoins
How to Accept Bitcoin Payments for Your Store
Learn about bitcoin POS systems
How do Bitcoin Transactions Work?
Bitcoin addresses and private keys
Is Bitcoin Legal?
The current regulation around bitcoin
Who is Satoshi Nakamoto?
The founder of bitcoin
How Bitcoin Mining Works
By confirming transactions
How to Set Up a Bitcoin Miner
Generate bitcoins yourself
What are Bitcoin Mining Pools?
What are pools how and how to join them?
How Does Cloud Mining Bitcoin Work?
Alternative bitcoin mining solutions
How to Calculate Mining Profitability
Can you make a ROI?
How to Make a Paper Bitcoin Wallet
Creating an unhackable bitcoin wallet
Can Bitcoin Scale?
A look at the debate and the tech
What is SegWit?
A new way of storing transaction data
What is the Lightning Network?
Off-chain transaction channels
What is Bitcoin Cash?
Same blockchain, different characteristics.
Hard Fork vs Soft Fork
Why and how do blockchains split?
What is the Difference Between Litecoin and Bitcoin?
It’s the silver to bitcoin’s gold
How to Buy Litecoin
How to buy the bitcoin alternative litecoin
How to Mine Litecoin and other Altcoins
How to generate your own altcoins
Understanding Bitcoin Price Charts
A primer on bitcoin price charts
Bitcoin E-Commerce Services for Merchants
How to accept bitcoin at your business
What is Blockchain Technology?
A system of distributed data and logic
How Does Blockchain Technology Work?
Cryptographic keys, distributed networks and network servicing protocols
What Can a Blockchain Do?
Identity, recordkeeping, smart contracts and more
What is a Distributed Ledger?
A dynamic, independently maintained database
What is the Difference Between Public and Permissioned Blockchains?
Can anyone read or write to the ledger?
What is the Difference Between a Blockchain and a Database?
It begins with architectural and administrative decisions
What Are the Applications and Use Cases of Blockchains?
Tokenization, auditing, governance, settlement and more
How Could Blockchain Technology Change Finance?
Cross-border payments, new asset classes, regulatory compliance and more
What are Blockchain’s Issues and Limitations?
Complexity, size, costs, speed, security, politics and more
Why Use a Blockchain?
To manage and secure digital relationships as part of a system of record
What is Ethereum?
A blockchain application platform and ‘world computer’
What is Ether?
The ‘fuel’ of the ethereum network
How to Use Ethereum
Wallets, trading and ‘dapps’
Who Created Ethereum?
Vitalik Buterin
How Ethereum Mining Works
‘Proof of Work’ and ‘Proof of Stake’
How to Mine Ethereum
GPUs, mining software and pools
How Ethereum Works
‘Turing-complete’ programming, ‘state’ and the ‘EVM’
What is a Decentralized Application?
A distributed ‘smart contract’ system
What is a DAO?
A ‘decentralized autonomous organization’
How Do Ethereum Smart Contracts Work?
Code, transaction fees and ‘gas’
How Will Ethereum Scale?
‘Sharding’ and ‘off-chain’ transactions
What is an ICO?
Initial Coin Offerings refer to the distribution of digital tokens.
Read the full article
A database running on the World Wide Web is most often using a client-server network architecture.
A user (client) with permissions associated with their account can change entries that are stored on a centralized server. By changing the 'master copy', whenever a user accesses a database using their computer, they will get the updated version of the database entry. Control of the database remains with administrators, allowing for access and permissions to be maintained be a central authority.
This is not at all the same as with a blockchain.
For a blockchain database, each participant maintains, calculates and updates new entries into the database. All nodes work together to ensure they are all coming to the same conclusions, providing in-built security for the network.
The consequences of this difference is that blockchains are well-suited as a system of record for certain functions, while a centralized database is entirely appropriate for other functions.
Decentralized control
Blockchains allow different parties that do not trust each other to share information without requiring a central administrator. Transactions are processed by a network of users acting as a consensus mechanism so that everyone is creating the same shared system of record simultaneously.
The value of decentralized control is that it eliminates the risks of centralized control. With a centralized database, anybody with sufficient access to that system can destroy or corrupt the data within. This makes users dependent on the administrators.
Some administrators have earned the trust put in them, for the most part. People's money is not stolen by banks that record the money they hold in private databases, for example. And, there is a logical reason why you would want centralized control. Centralized control can be a speciality, a reason for being.
But, that also means those with control, such as a bank, need to spend billions of dollars keeping these centrally held databases from being altered by hackers or anyone else who might wish to profit from another's loss. If the central administrators we're trusting to keep our information secret fail in this regard, then we lose.
History of itself
Most centralized databases keep information that is up-to-date at a particular moment. They more or less are a snapshot of a moment in time.
Blockchain databases are able to keep information that is relevant now, but also all the information that has come before. Blockchain technology can create databases that have histories of themselves. They grow like ever-expanding archives of their own history while also providing a real-time portrait.
It is the expense required to compromise or change these databases that has led people to call a blockchain database immutable. It is also where we can start to see of the evolution of the database into a system of record.
Performance
While blockchains can be used systems of record and are ideal as transaction platforms, they are considered slow as databases when compared to what is possible for digital transaction technology that we see today with Visa and PayPal.
While there will certainly be improvements to this performance, the nature of blockchain technology requires that some speed be sacrificed. The way distributed networks are employed in blockchain technology means they do not share and compound processing power, they each independently service the network, then compare the results of their work with the rest of the network until there is a consensus that something happened.
Centralized databases, on the other hand, have been around for decades, and have seen their performance increase in lock-step with a formula that has come to define innovation in the digital era: Moore's Law.
Confidentiality
Bitcoin is a write-uncontrolled, read-uncontrolled database. That means anyone can write a new block into the chain, and anyone can read a block in the chain.
A permissioned blockchain, like a centralized database, can be write-controlled and read-controlled. That means the network or the protocol can be set up so only permissioned participants can write into the database or read the database.
But, if confidentiality is the only goal, and trust is not an issue, blockchain databases pose no advantage over a centralized database.
Hiding information on a blockchain requires lots of cryptography and a related computational burden for the nodes in the network. There is no way to do this that is more effective than simply hiding the data completely in a private database that does not even require network connectivity.
Think of all the databases Ethan Hunt has broken into in the "Mission: Impossible" series and you can get a sense of the type of confidentiality possible in the private databases.
Authored by Nolan Bauerle; images by Maria Kuznetsov; Coindesk
NEXT: WHAT ARE THE APPLICATIONS AND USE CASES OF BLOCKCHAINS?
INDEX: A BEGINNERS GUIDE TO BITCOIN AND BLOCKCHAIN TECHNOLOGY
What is Bitcoin?
It’s a decentralized digital currency
Why Use Bitcoin?
It’s fast, cheap to use, and secure
How Can I Buy Bitcoin?
From an exchange or an individual
How to Buy Bitcoin in the UK
Buying bitcoin in the UK
How to Store Your Bitcoin
Use a digital or paper wallet
What Can You Buy with Bitcoin?
Spend your bitcoins
How to Sell Bitcoin
A guide on how to sell your bitcoins
How to Accept Bitcoin Payments for Your Store
Learn about bitcoin POS systems
How do Bitcoin Transactions Work?
Bitcoin addresses and private keys
Is Bitcoin Legal?
The current regulation around bitcoin
Who is Satoshi Nakamoto?
The founder of bitcoin
How Bitcoin Mining Works
By confirming transactions
How to Set Up a Bitcoin Miner
Generate bitcoins yourself
What are Bitcoin Mining Pools?
What are pools how and how to join them?
How Does Cloud Mining Bitcoin Work?
Alternative bitcoin mining solutions
How to Calculate Mining Profitability
Can you make a ROI?
How to Make a Paper Bitcoin Wallet
Creating an unhackable bitcoin wallet
Can Bitcoin Scale?
A look at the debate and the tech
What is SegWit?
A new way of storing transaction data
What is the Lightning Network?
Off-chain transaction channels
What is Bitcoin Cash?
Same blockchain, different characteristics.
Hard Fork vs Soft Fork
Why and how do blockchains split?
What is the Difference Between Litecoin and Bitcoin?
It’s the silver to bitcoin’s gold
How to Buy Litecoin
How to buy the bitcoin alternative litecoin
How to Mine Litecoin and other Altcoins
How to generate your own altcoins
Understanding Bitcoin Price Charts
A primer on bitcoin price charts
Bitcoin E-Commerce Services for Merchants
How to accept bitcoin at your business
What is Blockchain Technology?
A system of distributed data and logic
How Does Blockchain Technology Work?
Cryptographic keys, distributed networks and network servicing protocols
What Can a Blockchain Do?
Identity, recordkeeping, smart contracts and more
What is a Distributed Ledger?
A dynamic, independently maintained database
What is the Difference Between Public and Permissioned Blockchains?
Can anyone read or write to the ledger?
What is the Difference Between a Blockchain and a Database?
It begins with architectural and administrative decisions
What Are the Applications and Use Cases of Blockchains?
Tokenization, auditing, governance, settlement and more
How Could Blockchain Technology Change Finance?
Cross-border payments, new asset classes, regulatory compliance and more
What are Blockchain’s Issues and Limitations?
Complexity, size, costs, speed, security, politics and more
Why Use a Blockchain?
To manage and secure digital relationships as part of a system of record
What is Ethereum?
A blockchain application platform and ‘world computer’
What is Ether?
The ‘fuel’ of the ethereum network
How to Use Ethereum
Wallets, trading and ‘dapps’
Who Created Ethereum?
Vitalik Buterin
How Ethereum Mining Works
‘Proof of Work’ and ‘Proof of Stake’
How to Mine Ethereum
GPUs, mining software and pools
How Ethereum Works
‘Turing-complete’ programming, ‘state’ and the ‘EVM’
What is a Decentralized Application?
A distributed ‘smart contract’ system
What is a DAO?
A ‘decentralized autonomous organization’
How Do Ethereum Smart Contracts Work?
Code, transaction fees and ‘gas’
How Will Ethereum Scale?
‘Sharding’ and ‘off-chain’ transactions
What is an ICO?
Initial Coin Offerings refer to the distribution of digital tokens.
Read the full article
Satoshi Nakamoto
Keine Verbindung
Verbindung wird wiederhergestellt
Etwas ist schiefgelaufen
Wir sind gleich wieder da