The current cloud and server architectures of traditional databases are vulnerable to breaches due to their centralised IT infrastructure. For applications that require a high level of data integrity, such as those that handle financial or privacy-sensitive data, exploring blockchain technology in a clean slate scenario can be highly interesting.
By leveraging a blockchain database, you can create a custom solution that meets your specific needs without having to conform to the limitations of pre-existing traditional databases. This allows for greater flexibility and control over a database’s functionality and security.
Key takeaways
- Traditional databases only store the current state of information
- Blockchain stores a history of all transactions in the cryptographic signed database
- On a blockchain, you can replay all transactions to reach the state information
- Blockchain database provides a complete audit trail of all information flow
- Blockchain databases offer an extra layer of security by creating an unalterable and tamper-resistant data record
- On a blockchain, the historical record can be available and can be checked and verified by anyone with access to the blockchain database, in multiple locations
The fundamental difference
Blockchain databases differ from traditional databases in that they comprise a sequence of transactions that are securely anchored and immutable. In contrast, traditional databases are a collection of state information that can be mutated and lose logging history over time or in the case of a security breach.
Blockchain databases store every transaction that has ever taken place. Consequently, creating a complete sequence of events that forms an unalterable record. So, in order to find the person’s state information, you can replay the whole chain of transactions. However, to replay all transactions from the entire blockchain can be extensive and time-consuming. If you want to read a database state and don’t want to replay the complete history, you can also store it in a database next to the blockchain, or use a block explorer application. Then, it becomes a whole architecture that is highly secure, has high performance, and is immutable. For quick recovery in the event of an incident, block producers can take snapshots of the blockchain at regular intervals, decreasing replay time.
Significant improvements in security
Blockchain transactions are completely encrypted and usually decentralised on multiple servers. Therefore, there is a need for highly available architecture with multiple operators across the globe to check and verify transactions. This makes the whole architecture cyber-secure.
Imagine having 21 validators plus 5 standby who operate the blockchain. In a hypothetical scenario where one validator is compromised and tries to change the information on the blockchain, they would not succeed. This is because the other 20 validators have the original sequence of all transactions. This is an example of a consensus mechanism. Any new information added to the database needs to be approved by the majority of validators before being added on-chain.
Ideal use cases
In the current market landscape, blockchain databases offer a more tailored solution for addressing custom in-house applications. As an example, if you are an IT manager for a municipality, and you want to create a database specifically for administration purposes, building it on top of a blockchain (like Europechain) is an option. This wouldn’t be feasible with an off-the-shelf application that is already built on an existing data architecture.
A blockchain database can be an ideal solution in situations where data security, transparency, and immutability are crucial. Among these industries are finance, healthcare, supply chain, and real estate, all of which require secure and reliable tracking of transactions.
