Cryptocurrency 101: What is Blockchain? How is it Different than Regular Databases?

What exactly is blockchain technology?

Blockchain is a decentralized open-source ledger that keeps track of transactions. Its only task is to record everything that is happening on a network such as Bitcoin.

Blockchain is a distributed ledger technology that enables a set of peers to work together to create a unified, decentralized network. The peers can communicate and share information through nodes that share data among each other on the network with the help of the consensus algorithm.

Also, there is no need for a centralized authority which makes the whole network trustworthy when compared to other networks.

Blockchain is not limited to only tracking monetary transactions, it can also be used to track transactions/ transfer of information such as supply chain.

How is blockchain different than standard SQL databases?

The standard SQL database, unlike blockchains, are a centralized ledger that is run by an administrator or entity such as a business.

For example, social media platforms like Twitter, Facebook, and Instagram use SQL databases to store information required for their networks.

Databases also use unique features including the ability to read and write. Here, only the parties with proper access such as moderators or administrators can do Write and Read actions.

SQL Databases also exhibit the ability to store multiple copies of the same data and their history. This is done with the help of a trusted centralized authority who manages the server.

By comparing the blockchain and SQL database, it is easy to spot the difference in how authority works between the two.

Blockchain is designed to work in a decentralized network where information is able to be stored on multiple nodes connected to the network whereas the databases are always centralized. This unique feature of blockchain gives it the leverage it needs to become the next generation of technology, as censorship, surveillance and general abuse of central authority in certain fields of the internet become more of a concern to the general public.

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