Blockchains and databases have a lot in common; to begin with, they are both used for storing data, which is why you often see both terms pop up wherever there’s a discussion about blockchain technology. You could even say that blockchains are a type of database without being completely wrong.

However, blockchains and databases are structurally and functionally different from each other. So, what is a database? What is a blockchain? And, what is the difference?

What Is a Database?

A database is a collection of organized information that is stored and accessed electronically. Databases are managed through a Database Management System (DBMS), which is the software through which end users interact with the database. The database, the DBMS, and any other associated applications are referred to as “database systems.”

Databases are classified according to their design, i.e., how they sort, organize, and store data. Database design takes into consideration several techniques and practical considerations, including data modeling, efficient data storage and representation, security, privacy, and distributed computing issues, such as fault tolerance.

There are several types of data models, including the hierarchical, network, object, and document models, with the most popular being the relational model, which arranges data into tables composed of rows and tables called “relations.”

However, brought along by the emergence of the internet, the 2000s saw a spike in the demand for large distributed databases with high partition tolerance, which was a problem for relational databases. In response, other data models that could handle scalability better became popular, such as NoSQL and NewSQL.

Although there are several types of databases, there is one thing that they all have in common. An administrator runs them centrally through the DBMS, whether distributed or not, and the administrator has the ability to not only read but write.

Databases have many practical use cases, including in the finance, telecommunications, and transportation industries, and are used to hold library systems, flight reservations, content management systems, and more.

What Is a Blockchain?

A blockchain is, simply put, a distributed ledger, which some could say is a type of distributed database. And they would not be completely wrong. With both being the product of distributed computing, blockchains and distributed databases share many of their underlying technologies.

Blockchains are distributed because, like distributed databases, they are not located in a single place but across different nodes which are joined together through a peer-to-peer network, virtually turning it into a single ecosystem. But that is as far as their similarities go.

As opposed to distributed databases, blockchains are not centrally managed. Instead, blockchains function as a decentralized peer-to-peer networks, with nodes verifying and agreeing to the current state of the blockchain through a consensus mechanism.

Blockchains store data in the form of “blocks,” with each block containing a cryptographic hash of the previous block, a timestamp, and transaction data. Finally, once consensus is reached, new blocks are added to the blockchain by securely linking them together through cryptography.

Although records on a blockchain can, in theory, be altered, blockchains are considered by some as secure by design and are a good example of a distributed computing system with high partition tolerance.

Blockchain technology is still being developed, and many new use cases are being found every day. Its use cases are as a digital ledger for cryptocurrencies, the settlement of smart contracts, the tokenization of virtual items, and supply chain management.

What Is the Difference Between a Database and a Blockchain?

Although databases and blockchains both serve as data stores, they are structurally and functionally different from each other, from the way they store and organize data to the way they are managed.

Blockchains record data in the form of blocks as opposed to other data structures traditionally used by databases, and because they are decentralized, they do away with the need for an administrator. For all these reasons, blockchains are best described not as a database but rather as a data store.