What is Blockchain?
Blockchain technology refers to a list of records, primarily called blocks, linked together with cryptography’s help. Each block consists of a cryptographic hash, transaction data, and a timestamp. It has a decentralized approach to control and monitor data, thereby eliminating the risk of data modifications by third parties as it prohibits any changes by design.
5 Features of Blockchain
- Time reduction: Blockchain can reduce the operational time for industries. For example, it can help the faster settlement of trades in the financial industry by eliminating the lengthy process required for verification, settling, and clearance.
- Unchangeable transactions: Block doesn’t allow any modification to data entries by third parties. It only allows the insertion of data through the new block, which can neither be removed nor changed in any form.
- Reliability: Blockchain provides high reliability because it requires interested parties to certify and identify themselves. It eliminates double records and speeds up transactions to take place smoothly.
- Security: Blockchain integrates advanced cryptography, ensuring that all data entered is stored securely inside each block. It also uses Distributed Ledger Technology, where each party involved has a copy of the original Blockchain. This allows the system to operate smoothly even if many nodes fail.
- Decentralized: Blockchain carries a standard set of rules for how each node transfers information. There is no central authority for supervision of any data exchange.
What is an Immutable Database?
An immutable database is one that only allows the addition of data to it. You cannot change or delete any data entries made in the database. Instead, you are required to create entirely new data entries, which leads to the old entry being marked as part of the older version. It preserves all history to show how each data entered has reached its current state. Because of this preservation, auditing data becomes convenient as there is the availability of any change made.
4 Uses of Immutable Database
- Keeping track of financial transactions: Immutable databases make it convenient to track all financial transactions. Each debit or credit entry can be easily tracked, monitored, and accessed.
- Reconciling supply chains: It allows storing historical data and transactions, which means that any information about manufactured batches, shipping, supply stores, or sales can be tracked and accessed conveniently.
- Maintain history of claims: The immutable database can be used to track the lifetime of a claim to verify its identity or watch for any data entry errors and manipulation.
- Centralize records: The database can be used to maintain and access clean digital records elements such as employee details, payrolls, leaves, etc.
5 Key Differences Between Blockchain and Immutable Database
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- Centralized and Decentralized: Database takes a more centralized approach for data supervision. All data storage is monitored. On the other hand, Blockchain is decentralized, which means that there is no central authority that supervises any data input.
- Permission to make changes: In a database, any modification will require explicit permission from the administrator. However, in the case of Blockchain, each party involved has a copy of the original chain. They can make changes when necessary in their copies which doesn’t affect the master copy.
- Data history: Databases store data entries that are updated to a certain point. On the other hand, Blockchain keeps the information about present data entries and the history of past data storage.
- Longevity: Databases work well for extensive data collection processes but can slow down while performing certain functions. On the other hand, Blockchain is suitable for quick, transactional requirements but can slow down when extensive data collection is involved.
- Data integrity: Databases have less security, which means that if fallen into the wrong hands, data can be changed or removed by malicious parties. Blockchain has more protection involved as it requires accurate certification and verification before any party can use and access data.
Final Verdict – The More Suitable Solution for Data Storage
Regarding data storage, both Blockchain and immutable databases have their advantages. Depending on your requirements, you can choose the one that will provide you with the best solutions.
If you’re looking for something quick for short-term transactional purposes, choosing blockchain technology will help you with data storage. It uses a decentralized approach, so you and any other party involved can access and use the data at any time.
On the other hand, if you’re looking for long-term storage with large data volumes, an immutable database will help you meet your requirements. They are perfect for storing, monitoring, and tracking data conveniently and easier for any data audits.