Blockchain Does not Replace Traditional Databases (2024)

There is a lot of hype behind blockchain, however, there are many false claims. One in particular, is that since blockchain can be used to verify a system of records, traditional databases are no longer needed. This is very misleading because blockchain and databases are different types record systems. In actuality, they compliment each other.

Blockchain Database

To understand the concept of ablockchaindatabase, it’s important first to understand blockchain. This is a distributed ledger technology that stores information in a data structure called blocks. It is a ledger that enables peers to store chunks of bundled information in uniformly sized blocks that are distributed to a group of computers not owned by a single entity.

Every blockchain may be considered as a database, but every database cannot be considered as a blockchain. Here’s why,

Blockchain databases do exist. This technology is a kind of database because it is a digital ledger that stores information in data structures called blocks. On the other hand, a traditional database is a data structure used for storing information.

A database can be modified, updated and controlled by a single user called an administrator. This is where the central control comes in. A database always has an administrator who has complete control over it. The admin can create, delete, modify any record which is stored in the database. Admins can also perform administration on the database such as performance optimization and molding the size of the database to more manageable levels. A large database generally tends to slow down the performance index, so admins run optimization methods to improve the performance of the database.

AnEnterprise blockchaindiffers from a traditional database because it has a decentralized nature. Blockchains store information in uniformly sized blocks. Cryptographic security is provided by each block containing the hashed information from the previous block. They are extremely difficult to hack and tamper with due to the additional security features embedded within them.

As a one-way hash function, SHA-256 is used for hashing. In the blockchain, hashed information is the data and digital signature from the previous block and the hashes of the blocks that preceded it. By running that information through a hash function, the next block’s address can be determined.

Blockchain Vs Database: A Detailed Comparison

Here are some key differences to be taken into consideration

Steps to Create Blockchain Database

There are two factors to be taken into account before creating a blockchain database.

• deployment in enterprise or consortium

It’s important to determine whether the database will be used in the enterprise or consortium. In some cases, it may be possible that an enterprise is using blockchain internally for data storage and acts as a central authority governing the data. In this case, the database is centralized. But in most of the cases, enterprise blockchain operates in a consortium, where permissioned organizations within a consortium collectively own and control data.

• Usage

This is the second important factor to be taken into account. Operational data is the data used directly by the clients connecting to the database. For example, organizations within a consortium have joined a channel within the network, all organizations within that channel are able to obtain the data with no intermediary. Whereas Non-operational data, data can be accessed via a mediator.

Centralized With Operational Data Within Enterprise Environment

Although contrary to ethos of blockchain, you can deploy a centralized blockchain inside an enterprise environment. This centralization reduces the deployment process and can still offer the benefits of the blockchain as compared to other databases.

• This data store is useful in decision-making and operational reporting.
• A database needs to be handled by two or more administrators, each from a different location.
• Using this database, documents are immutable while assets can be created and transferred.
• The deployment provides third-party auditors with a solid track record for asset transfers.
• In this data store, clients directly access the data without any intermediary as part of the data is stored on the blockchain.

Centralized With Non-operational Data Within Enterprise Environment

Again, this centralized blockchain database deployment is managed by a limited number of admins. However, in this approach the clients interacts with the database which in turn connects to the blockchain to retrieve data.

• In this type of database, the data is not accessed directly by the clients
• This approach offers better performance as less number of nodes are required to accept a transaction
• Since data is only accessible to a limited number of clients, this method adds more privacy to the database.

Decentralized With Operational Data Within a Consortium

In this deployment, a consortium is created to remove the need for a single entity to control the database. The consortium is made up of multiple organization that would host a node on the blockchain.

• This approach ensures that the database is decentralized
• All companies act as individual nodes and thus are responsible for maintaining the database
• Decentralization increases the immutability of the data

Decentralized With Non-operational Data Within a Consortium

This deployment resembles the prior mentioned centralized deployment, yet, within this blockchain you have multiple administrators from different consortium organizations.

The above scheme allows for the same benefits as the Decentralized With Non-operational Data Within a Consortium, however, due to it centralized type nature, privacy and speed is increased.

Integration with EnterpriseEnvironment and blockchain

Blockchain integration differs significantly depending on the deployment type.It is similar to a traditional IT stack when thinking about centralized blockchains. The blockchain would be a part of the enterprise infrastructure alongside the application. Decentralized (permissioned, permissionless) blockchains, however, reside on multiple servers owned by different companies.

Steps to Consider When Building a Enterprise Blockchain

• Select the consensus mechanism

This technology relies on a consensus mechanism. This algorithm helps peers agree on the validity of new blocks added to the distributed ledger.

There’s no one size fits all consensus algorithm. You might choose a different option depending on the level of decentralization (permissioned, permissionless) , security, and transparency you need for your particular case.

The most common protocols include Proof of Work(PoW), Proof of Stake(PoS), and Proof of Authority(PoA) Byzantine fault-tolerant (BFT).

• Select Blockchain Platform

You’ll base your choice of platform on the consensus mechanism. Different platforms support different algorithms. But given the number of blockchain options available out there, this task might turn out a bit more challenging than you expect.

If you know exactly what type of blockchain you need, you can narrow down the choices significantly. You can choose between public or private blockchains or try to get the best of both worlds.

The most common enterprise blockchains are Hyperledger, Corda, Corda, Ethereum, Quorum

• Implement Integration

After selecting your blockchain platform, it’s time to decide how you’ll use its functionalities into your environment.

In our experience, introducing a blockchain proxy layer is the best way to accomplish this. This layer allows you to

• Communicate blockchain functionalities to your enterprise systems, including legacy systems
• Combine multiple blockchains within one environment and raise them through a single protocol
• See every event in your blockchain system in real-time
• Have events trigger processes across both on and off-chain apps and services
• Optimize security and stability, despite the interoperability achieved with the help of middleware, your enterprise applications exist independently from the blockchain stack

Blockchain Database Design Overview

There are two main issues that are faced if anyone thinks of using blockchain as a database.

• The technology contains transactional data but has very limited querying capabilities
• To validate a block in the blockchain, a majority of the nodes need to approve it. The more there are nodes in the network the more time it takes to validate a block. In addition, the more resources used to validate the transaction, the more it will cost.

Instead of using blockchain as a database, it is advisable to take an existing database and then add features on top of it. Here, two database layers are used

• The first layer uses a lightweight consensus protocol that can provide data integrity with good performance for querying
• The second layer uses the Byzantine fault-tolerant (BFT) consensus mechanism to store evidence of database operations for the first layer. The two layers are connected through the blockchain anchoring mechanism. This is where theanchoring mechanismlinks the first layer with the blocks of the second layer. Thus, creating a chain of evidence validating the data from the first layer.

Conclusion

The purpose of this article is to provide a brief overview, comparing traditional databases and blockchain databases. Blockchain offers many benefits, however, companies need to differentiate the true concept and usage of the technology from the false claims However, in the next few years, we’ll see most of the global companies implement at least one of the blockchain systems.

As a leadingblockchain development company,Gyan Solutionsoffers reliable blockchain development services to startups and large enterprises. If you’re looking forward to implementing your own blockchain system for your enterprise, and want to partner with experienced developers who are familiar with the underlying blockchain technology, Gyan Solutions can help you.