The blockchain is a special kind of database that has the property of being immutable and tamper proof. This makes it suitable for high security applications such as banking, cargo tracking and value transfers where data integrity is crucial.
Blockchains and cryptocurrencies are different concepts. Cryptocurrencies which use the Bitcoin architecture require a blockchain in order to run. Blockchains, on the other hand, do not require cryptocurrencies. For example, a bank may run an internal blockchain in a controlled environment where mining and decentralization are not required (and, therefore, no cryptocurrency is employed).
Currently, blockchains are beggining to be used for many applications previously accomplished through paperwork, such as substituting bills of lading in oil tankers and cargo ships.
- Tamper proof
- Normally decentralized (but need not be)
- Cryptographically secured
So, in essence, yes, blockchains are glorified databases. But they’re glorified for good reason: their applications are endless and cryptocurrencies have become the motivation for a lot of academic research and development of new and innovative products that use the blockchain concept.
In fact, blockchains can be implemented using traditional databases! The most popular Ethereum client, geth, uses a database system called leveldb to implement its blockchain storage subsystem. Relational databases and blockchain are not mutually exclusive, and may be used together in innovative ways.
Illustration Credit: Wikipedia
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