Blockchain vs. Database: Key Advantages of Blockchain - Magnimind Academy

Blockchain vs. Database: Key Advantages of Blockchain


    Blockchain vs. Database? This question arises due to the remarkable features of blockchain that differentiate it from traditional database systems.


    Blockchain has changed how various industries manage their tasks and a significant number of industries are increasingly adopting this technology. More blockchain involvement in various industries is surmised in the future. 


    Below, we will mention key differences between blockchain and traditional database systems. We will also see how these differences bring advantages to blockchain and what makes it better than traditional database systems.



    Traditional databases use CRUD(create, read, update, delete) method as their primary way of recording information. This method allows modification or deletion of the recorded data. These databases are prone to attack and manipulation by hackers or rogue administrations.


    On the other hand, data recorded in the blockchain cannot be altered, modified, or deleted.


    Each data block is verified by all nodes and tagged with a specific hash code that links one block with the others. If any change is to be made in the blockchain, it has to be confirmed by the majority of the participants, which ensures that no one can tamper with the data stored in a blockchain. 


    This immutability makes blockchain a favorite for recording transactions, tracking, and tracing products.



    Unlike traditional systems that store data in a centralized server, a blockchain network shares controls, functions, and data between several computer nodes. Each node has its own copy of the information. The supervision and decision-making authority is also shared with a dispersed network.


    Each node has its own copy of the disseminated record. This means that no one has to trust any other member. This decentralization is the key to the security and transparency of blockchain technology. 


    World’s largest corporations use centralized data systems as well as servers. Even though these corporations implement and maintain best network practices, their data systems and servers act as attractive targets for hackers and the operations may get affected. Decentralization offered by blockchain prevents this problem and this is why this technology is being adopted by several industries.


    Improved Security

    The third point about the blockchain vs. database comparison is security. Data in a blockchain is encrypted, meaning no one can reveal the identity of a blockchain unless provided with a specific address. This provides anonymity and privacy to the users guaranteeing data security.


    The decentralized nature of the blockchain eliminates the need for a central authority to validate transactions. This makes it difficult for anyone with malicious intent to corrupt the data making it tamper-proof.


    Blockchain uses consensus mechanisms. This means that the cryptographic algorithms cannot be changed without the consensus of the maximum number of participants. If someone tries to taint a user’s record, it will be rejected by most of the individuals in the network. Or if a single actor’s hacked computer cannot take the entire blockchain network down.


    Thus the security of the blockchain is highly reliable and trustworthy, making it ideal for financial transactions and data sharing.


    Instant Transactions

    One of the major hassles in business is time-consuming contractual transactions. This is particularly true for businesses that process large amounts regularly.


    On the other hand, blockchain technology works around the clock, i.e., it makes transactions faster, more efficient, and seamless by eliminating third parties, thus saving time and costs and preventing human errors.


    Smart contracts are programs that are stored on the blockchain and are implemented automatically when pre-terms are met by both parties. These allow companies to automatically validate, sign and enforce agreements.


    Improved Transparency

    Blockchain maintains a higher level of transparency than traditional systems. In financial transactions, once a payment is made, the other party can instantly check and track the payment without the approval or even involvement of any third party.


    Physical, digital, or intellectual products can be tracked and traced as they move from one place to another, or ownership changes hands. Companies can also track the location or conditions of the shipment products etc.


    Network members can control what information others can see and their actions. Companies can also decide what data is accessible to the public and what is accessible only to authorized people.


    Each member of a blockchain network can verify records anytime. Blockchain networks are called “trustless networks.” This isn’t because the members do not trust each other but don’t have to.


    Cost Efficiency

    As described earlier, blockchain eliminates third parties and other authorities from verifying transactions. The technology allows business-to-business and peer-to-peer transactions to be completed without any involvement of a third-party like a bank.


    Thus, there is no need for costly middlemen. This reduces intermediaries’ cost in a traditional network and makes blockchain cost-effective.


    Moreover, blockchain is immutable, which means that there is no need for costly auditors and reconciliation. All the members have a copy of the same data, which significantly reduces the cost of making and sharing copies of the same data.



    When working with traditional databases, it’s quite difficult to check historical transactions. However, blockchain technology has revolutionized the concept of traceability by providing secure information sharing and enhancing the monitoring and control of product quality, operations, and real-time data acquisition throughout the supply chain. This increased transparency and visibility offer numerous benefits to businesses and consumers alike.


    One of the key features of blockchain is its ability to create an irreversible audit trail. This enables users to track an object back to its origin, providing a clear and trustworthy record of its history. Companies can now monitor their products as they move through various stages of the supply chain, ensuring that each step is accounted for and verified.


    A prime example of blockchain’s impact on traceability is Walmart, an American retail corporation that has implemented blockchain-based systems to track and trace a wide range of goods. By utilizing this technology, Walmart can effectively monitor the journey of products from their source to the store shelves, ensuring quality control, reducing the risk of counterfeit goods, and increasing consumer confidence.


    User Control

    Blockchain provides its users with complete autonomy, privacy, and security to its users. You can decide what information to share with others and what to keep private. Users can also decide what actions other members can take with their data. 


    A person’s identity is completely anonymous, i.e., a user can use blockchain-based technologies with all their features without the fear of being tracked or traced.


    Blockchain technology is free from censorship as there is no single authority. Therefore no one can interrupt the process and operations of a network.



    Although blockchain technology was initially developed to work only in the financial arena, it has already started taking over other industries through its huge potential and slowly becoming an absolute game changer. 


    According to some experts, blockchain technology is much more promising than the cryptocurrencies it was designed to support. With its implementation, more valuable usage opportunities are coming into existence almost regularly.

    .  .  . To learn more about variance and bias, click here and read our another article.

    Related Articles