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Blockchain technology has become increasingly popular over recent years, with many hailing it as the next big thing in data storage and management. At its core, a blockchain is a distributed ledger recording transactions in a secure and transparent manner. But what exactly is a blockchain database? In this article, we’ll explore the basics of blockchain technology, its use as a database, and its potential applications and limitations. Whether you’re a tech enthusiast or simply curious about the latest trends in data management, this article will provide a comprehensive overview of blockchain databases and their role in shaping the future of technology.

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Before diving into what a blockchain database is, it’s vital to understand the concept of a traditional database. In its simplest form, a database is an organized collection of data that can be accessed, managed, and updated easily. Examples of common databases include SQL databases, NoSQL databases, and graph databases. These databases have been used for years in various applications such as finance, healthcare, and e-commerce.

Looking for some more details about databases?

We recommend checking the comprehensive guide on different database types and their common use cases.

Read the article about Relational vs Non-relational Databases

A blockchain database is a type of database that uses blockchain technology to store and manage data. Unlike traditional databases, blockchain databases are decentralized, meaning they are not owned or controlled by a single entity. Instead, they are maintained by a network of computers that work together to verify and add new blocks of data to the chain.

One of the key features of blockchain databases is that they are immutable, which means once data has been added to the chain, it cannot be altered or deleted. This makes blockchain databases highly secure and resistant to tampering, which is especially important for sensitive data such as financial records or personal information.

Another key feature of blockchain databases is that they are transparent, meaning anyone can view the entire chain of data. This helps to increase accountability and reduce the risk of fraud or corruption.


To understand how a blockchain database works, it’s important to first understand the basic structure of a blockchain. A blockchain is a series of blocks, each containing a set of transactions. When a new transaction is added to the chain, it is verified by the network of computers that maintain the blockchain. Once the transaction is verified, it is added to a new block, which is then added to the chain.

Unlike traditional databases, where a central authority determines who can access and modify the data, blockchain databases are maintained by a decentralized network of nodes. Each node has a copy of the entire database and works to validate and verify transactions before they are added to the blockchain. This consensus mechanism ensures that the database remains secure and tamper-proof.

The security of blockchain databases is further enhanced by the use of cryptographic algorithms. Each block in the chain contains a unique cryptographic hash, which is generated based on the contents of the block. If any data in the block is changed, the hash will also change, alerting the network that the data has been tampered with.

One of the key benefits of blockchain databases is their ability to eliminate the need for intermediaries in transactions. In traditional databases, a central authority such as a bank or government agency is often required to verify and process transactions. With blockchain databases, transactions can be validated and processed automatically without the need for intermediaries.

Blockchain databases have numerous real-world applications, including in the finance industry, where they can be used to securely store and transfer digital assets such as cryptocurrencies. They can also be used in supply chain management to track the movement of goods from producer to consumer and in healthcare to securely store patient records.

However, blockchain databases are not without their limitations. For example, they are currently less efficient and more costly to maintain than traditional databases. Additionally, the level of transparency provided by blockchain databases may not be desirable in all situations.

As a result, blockchain databases are an exciting technology that shows the potential to revolutionize the way data is stored and managed. By leveraging the security and transparency of blockchain technology, blockchain databases can provide a secure and decentralized way to store and manage data. As the technology is still developing, it will be interesting to see how it is adopted and applied in various industries.


Blockchain databases have several benefits, including the following:


These databases are decentralized, meaning they don’t rely on a central authority or intermediary to manage transactions. Instead, transactions are validated by a network of nodes, each of which has a copy of the blockchain. This makes blockchain databases resistant to censorship. Additionally, the decentralization of blockchain databases ensures that the data is always available, even if one node goes offline, making it more reliable.


Transactions on a blockchain database are transparent and can be viewed by anyone with access to the network. This ensures that all parties involved in a transaction have the same information and can help to prevent fraud. Transparency also makes it easier to track and trace goods and services through a supply chain, as every transaction is recorded on the blockchain and can be accessed by authorized parties.


They use cryptographic techniques to secure transactions and prevent unauthorized changes to the data. Every transaction on the blockchain is encrypted and verified by a network of nodes which makes it extremely difficult to alter or manipulate the data. 


Once a transaction is recorded on a blockchain database, it cannot be altered or deleted. This makes the data on the blockchain permanent and immutable, ensuring that it can be trusted. Immutability is particularly important in applications such as financial transactions, where it is crucial to ensure that the data cannot be tampered with.


Blockchain databases can be more efficient in certain situations, such as when multiple parties need to access and update the same data. In traditional databases, these updates often require intermediaries such as banks or lawyers, which can slow down the process and increase costs.  Additionally, blockchain databases can be used to create smart contracts, which are self-executing contracts with the terms of the agreement directly written into code, further streamlining processes and reducing the need for intermediaries.

What are smart contracts?

Find some additional details about smart contracts examples and use cases for businesses.

Read the article about Smart Contracts


Let’s say that the benefits outlined in this article are an ideal fit for a specific use case. We can now store our data within the blockchain database as if it were an ordinary database. This would permit us to create and incorporate applications over the blockchain databases.

Trust Levels

Level 1: ID of Participant

A lot has been said about the lack of trust in the model enabled by public blockchains. This is a real innovation. That said, with regards to private blockchains, those involved are all identified since they must be on board and invited into the network of private blockchains. Therefore, being mindful about who is participating provides a trust level and eliminates the mining requirement – work activity proof that makes it troublesome for shady participants to dominate and regulate the blockchain network.

Level 2: Integrity of Transactions

The integrity of transactions is accomplished by the locked-down history shown in the ledger. An individual participant can’t change or ‘rewrite’ the history after it’s been validated and locked down in the blockchain (unless 51% of the network is regulated by them).

This additional trust level adds extra value in comparison with conventional databases. The data is shared and encrypted, but the transaction log is secured to the point where it can’t be changed by any single participant. It can, however, be assessed by a participant at any time.

Intelligent Contracts

We’ve been testing out Ethereum. We enjoy using it because the intelligent contract capability is much richer than other blockchain implementations out there. Why is this so essential?

  1. You can establish data structures inside the intelligent contracts, practically covering the blockchain into a blockchain database.
  2. You can create a permissions capability into intelligent contracts – practically embedding your security model within the blockchain database structure so that it can’t be changed unless approved by a consensus.
  3. You can establish a workflow for several participants.

Vertical vs. Horizontal Blockchain Scale

Blockchains were developed to be horizontally scaled. This is done to raise the number of instances operating the blockchains. That said, all instances hold a full copy of the data, and the processing is repeated. This is ideal for security and integrity but not great if you must process and store a substantial amount. You’ll require all nodes to be scaled vertically. In other words, they must have the ability to store and process massive amounts of data.

Nodes for Heavy Blockchains

How is an individual node scaled? Through a pair of dimensions:

  1. Processing
  2. Storage

A blockchain database node like Ethereum operates as an individual process. There might be some internal multithreading, but it’s a single process and likely can’t do a lot in parallel because of the block and transaction management’s sequential nature. With that, let’s say that processing can’t truly be scaled.

This brings us to data storage. At the moment, to store data, blockchains use local files. They might potentially be moved to a data store that is more scalable. This isn’t specifically vertical scaling because we’re discussing an individual node and having a scaled data store installed under it.

Blockchain Data Querying

Those who have worked with blockchains will understand that inserting transactions/data into a blockchain database is not fast – you must be patient while the block confirms your transaction. On Ethereum, this takes mere seconds.

It is faster to obtain it from an intelligent contract on a blockchain. You are simply obtaining data from the blockchain’s local copy instance – no involvement or ‘‘consensus’ of other nodes is necessary.

Blockchain Data Indexing

The primary concern with all databases is the performance of queries. This is solved with predefined indexes in relational databases. No-SQL database indexes are also formed. In Hadoop and similar large data analytics platforms, a large amount of unstructured/structured data are scanned in parallel. However, it is still not fast, regardless of modern incarnations like Apache Spark.

The method of how you establish your intelligent contracts in the blockchain database should be motivated by the approach to query your data.

Separate Smart Contracts

If it is being stored in smart contracts, you may have a unique instance of the intelligent contract for every data row. This method appears to be easy and clean. The downside is that each time a new smart contract instance is produced for all data rows, you’ll obtain a key. This key lets you access that precise, intelligent contract instance (and data) down the road.

The key must be stored someplace – perhaps in another contract or an external database, and won’t lend itself to querying.

Container Contracts

A data map or array is stored in a container contract. Within a single contract, you could potentially store the equivalent of a table. The benefit of this method is that it can be stored on a map. A key can be used to query your data down the road. You can produce multiple keys to let you query the data with unique parameters.

Index Contracts

Another method is to mix the initial pair of strategies. Store each ‘data entity’ in separate contracts, but use another contract to reference them. This other contract can hold a map structure or array, letting the items being searched for while also maintaining the keys to each data entity contract.

This third option lets all the querying and data happen inside the blockchain database while letting separate contracts hold data entities.


The benefits of blockchain databases are significant, particularly in situations where security and transparency are paramount. The use of blockchain databases is expected to grow in the coming years, driven by increased demand for secure and decentralized data storage solutions.

Despite the potential benefits of blockchain databases, it is important to note that they are not a silver bullet solution to all data management challenges. As with any technology, there are limitations and trade-offs to consider. It is important to carefully evaluate the use case for blockchain databases and determine whether they are the right solution for a particular application.

Should you have any additional questions about how to create a blockchain database for your project?

Visit our Blockchain Development Services Page, or fill in the contact form to get in touch. Our team will be happy to discuss the blockchain details with you.

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Frequently asked questions

What is a blockchain database?

A blockchain database is a digital ledger that records transactions in a decentralized, immutable, and transparent manner using cryptographic techniques to secure and verify the data.

What are the main benefits of blockchain databases?

The blockchain database benefits include the following:

  • Decentralized data storage

  • Immutability

  • Transparency

  • Security

  • Efficiency

What are examples of industries commonly leveraging the blockchain database?

These common examples are

  • Finance

  • Supply chain management

  • Healthcare

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