Preface – This post is part of the Blockchain Basics series.
Table of Contents
A database (DB) is an organized collection of information, just like a notebook, where you can read, write, update and delete data. It is one of the essential tools of all the organizations using computer technology. A database is also known as ledger. A ledger in accounting stands for a principal book where transactions are saved by date. In digital format these books take form of excel or DB. Going on further, wherever we discuss about ledger, it will stand for database.
Types of Database
There are different types of DB which are categorized based on their data saving format and structure. In this section we will discuss following two databases relevant to this paper:
- Relational Database
A Relational Database is database management system which utilizes the Primary Key(PK) and Foreign Key(FK) relationship. Almost every ERP solutions use Relational DB. In simple context, this ledger divides all data based on relations among them. For example, data of employee can be saved into three tables i.e. Employee Details table, Employee Address table and Employee Salary table where each table has Employee ID as a common key. The relationship among these tables can be seen below:
A Blockchain can be defined as a decentralized database, or simply a decentralized linked list, where list of records (called blocks) are linked via cryptography. By decentralized, we intend that there is no single ledger where all records are saved rather the same set of data is saved in numerous databases. A block in a Blockchain contains catalogue of records (known as transaction data), a timestamp (i.e. UNIX time) and a cryptographic hash of previous block (hash converts the previous block data into a fixed length of random characters). This process of saving blocks is illustrated below (You can make your own blocks here):