Do you know that Distributed Database and Distributed Ledger are different?
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Well, if this sounds new to you, you are not the only one, the first time I got introduced to these terms, I too assumed that both the words have the same meaning and can be used synonymously. But most industry experts say otherwise. To understand the difference between the two, we need to understand the difference between Centralized, Decentralized and Distributed Networks. Let us familiarize ourselves with them.
Networks can be broadly classified into three types on the basis of connectivity and information sharing:
A Centralized Network is based on client and server model, where there is a master node (here: orange node) that is responsible for the information exchange throughout the network. The entire data and network traffic is concentrated on that one node.
A Decentralized Network much like the Centralized System also resembles a master and slave model but has more master nodes that help in distributing the network traffic among themselves and help in improving latency of the network.
A Distributed Network unlike the above two, is based on peer-to-peer model where each node acts as both a client and a server, distributing the job of information exchange evenly and significantly reducing the network traffic then the previous two models. Information Exchange is much quicker and efficient. No node has a higher priority.
Now that we had a walkthrough the definitions of the networking models, we can try understanding the difference between distributed database and Distributed Ledger.
Distributed Database v/s Distributed Ledger
In a Distributed Database, nodes trust each other, in a way where multiple nodes contain pieces of the respective database, all cooperating with each other to give a consistent view of the database they hold collectively. They can be visualized as a group of nodes, each storing a portion of the database much like a jigsaw piece that when interlocked in a rigorous fashion with other pieces forms a complete jigsaw puzzle. They are mostly based on the Traditional approach of how a huge database is created and viewed. Therefore, they cannot be considered as a fully distributed system, but resemble a decentralized system. Here, there is an inevitable centralization of data that takes place at each node necesitating the concept of ‘Trust’ among the nodes to validate the authenticity of the independent data gathered from each node. This mechanism is vulnerable to faulty nodes containing modified databases where there is no robust approach to mitigate the loss of authentic data that will be incurred by the network.
Whereas the principle behind a Distributed Ledger revolves around the concept of cooperation without the need of trust among the nodes but establishing a trust on the entire network. In this approach, data is distributed and each node contains the same copy(replica) of the ledger (or an entire record of transactions taken place over a period of time). Here no node assumes or trusts the data that the other nodes possess but the validity and/or authenticity of the data in the node is verified on the basis of a consensus mechanism mutually agreed upon by the network. Unlike many decentralized databases the visibility of most distributed ledgers are not restricted and a minor group of corrupt or faulty nodes will not create significant loss to the system making the entire network robust to unauthorised data alteration.
Examples Of Distributed Databases and Distributed Ledgers:
After understanding the term Distributed Database, you may find it to be a misnomer, but the below examples should help you differentiate between the two terms much easier.
AWS SimpleDb, CockroachDb and SQL query engine systems like Trino and many other well known Database systems with their storage and operation locations across the world rely on a combination of networking systems in the spectrum of Distributed Database. Edge Computing System makes use of the similar approach of decentralization. This concept is still widely used across many industries and organizations, owing to its familiarity, easier comprehension and implementation.
Popular Blockchain systems/networks like Bitcoin, Ethereum, Corda are distributed ledgers holding chains of transactional data with users making monetary transactions, sharing certificates, authenticating land deeds or just sharing information from all around the world. For most of them, The data has been accumulated ever since the birth of the respective blockchain. This concept is quickly being adopted by many organizations of different backgrounds holding a promising future for continuous research and development in this area.
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