Thanks to the rise of cryptocurrency, blockchain is now the talk of the town. Although the promise that it offers distributed transactions in terms of data integrity and transparency is unprecedented, its adoption has been slow. This might stem from a lack of awareness and hesitation in stakeholders to move to a new kind of data organization. So let us see why you should consider switching to blockchain from other technologies.
How is Blockchain Different from Other Technologies?
In conventional databases, a client-server network architecture is used. The client can make changes to data stored in a central server. A particular authority is responsible for providing access to the database by authenticating client credentials. If this authority is compromised, the data is not safe anymore.
But this is not the case in blockchain technology. Blockchain databases are made of several decentralized nodes (peer-to-peer), which all have equal rights and responsibilities on the network. All of them are allowed to add data, but they can only do so if over half the nodes are in agreement with the same. Once agreed upon, the new version of the chain gets saved on every node. This makes data on a blockchain database immune to tampering.
Therefore, blockchain is a much more favorable option in trustless systems. It reduces the dependency of entities on governments, notaries, lawyers, banks, and regulatory compliance officers.
Not All Decentralized Ledgers are Blockchains
You may be aware that blockchain is not the only distributed ledger technology out there. Not all DLTs need blocks in a sequence, and neither is there a necessity for proof of work in them. They are just databases distributed across several participants, websites, or regions. Theoretically, other DLTs can be more scalable than blockchain. This is because the blockchain’s speed of transactions depends on the network traffic, the number of nodes, etc.
DLT alternatives to blockchain include centralized databases, centralized ledgers, cloud storage, decentralized storage, and distributed databases. For example, Quantum Ledger Database used by Amazon makes an audit trail possible in the absence of the overhead of a blockchain. Amazon has achieved the scalability of a traditional cloud service using this but says that this may not be great for systems involving untrusting parties.
Microsoft and Oracle have introduced distributed databases for a long time. Some distributed ledgers do not need mining to grow the network, unlike Blockchain. While Iota Tangle does this by using an open-source project to expand the network, Hashgraph works on a protocol used by network nodes to share information among themselves.
Even among the different distributed ledger technologies available, blockchain stands out as it uses blocks for grouping and organizing information and cryptography to link these blocks securely. Furthermore, the append-only feature of blockchain further increases security and reliability as there is an audit trail to trace every update.
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