Why Database and Blockchain Technology Need Each Other

A very common pattern emerges when discussing Enterprise Blockchain solutions. IT practitioners often assume that Relational Database Technologies (RDB, often simply called SQL for a de-facto industry standard) and Blockchain Technologies must be archenemies competing for hegemony as a Single-Source-of-Truth for Enterprise Data.

However, the simple fact is that both serve a key need as Enterprises seek a more agile architectural approach, allowing them to accelerate business processes that have been traditionally slowed down by un-synchronized data silos.

Those data silos are implemented with traditional database technology – which excels in performance, and thereby allows enterprises to update data repositories (often called “ledgers”) quickly and arbitrarily. Which does speed up any linear, internal workflow within a tightly delineated team.

However, in the Age of the Digital Enterprise, many critical, revenue-generating business processes include intra- and inter-company participants. Each of which maintains one or multiple versions of ledgers that drive collaborative business processes forward. And of course, enterprises are reticent when it comes to opening up their ledgers and allowing every participant to enter, update or delete data in the ledger. That would represent a huge liability in an age of data breaches, GDPR, etc.

Hence the distributed silos (i.e. databases) are typically reconciled in painfully slow, manual and error-prone ways. In fact, many workflows are still governed by paper, fax or physical presence of two or more ledger owners. Inevitably, this results in un-synchronized ledgers between participants, leading to lengthy disputes, expensive reconciliation processes and painful audits. The un-synchronized ledger model clearly hampers business agility. On top of that, if a data breach occurs and malicious change is performed… how do you re-trace your steps back to a clean version? The un-synchronized ledger model also leads to an architectural security liability, both because of multiple attack surfaces as well as the fact that it becomes harder to re-establish the un-breached version of the ledger.

Enter Blockchain technology. It provides enterprises with an ideal platform to automate the synchronization of participants’ ledgers. No transaction is approved without secure consensus between all participants. Every transaction is immutably recorded as part of the data in the shared Blockchain. This provides a solid foundation for secure synchronization of privately held ledgers.

Database technology provides a supremely high performing source of truth within a trusted environment. Blockchain in turn delivers an over-arching mechanism to securely synchronize distributed, privately maintained ledgers (Blockchain is a shared ledger technology, after all), and is the perfect “shared source of truth enterprise messaging bus” to accelerate business processes that are the very essence of the digital age.

To put it in a different way, think of the CAP Theorem, which states that no technology can provide simultaneous Consistency, Availability and Partition-Tolerance of data. In any data exchange that involves transfer of financial goods (and most do), for obvious reasons the architectural trade-off is strictly in favor of Availability and Partition-Tolerance, since it guarantees the integrity of any privately-held ledger. And by the way, that is equally valid for Database and Blockchain technology – only at a different pace. There are several mechanisms to then provide for something called “Eventual Consistency” if the sources of truth drift apart. What Blockchain can do is seamlessly automate, accelerate and secure the path to “Eventual Consistency” whenever ledgers are shared, dramatically cutting down the time and cost incurred to achieve consistency.

With un-synchronized siloed ledgers, “Eventual Consistency” is a painfully slow process. In our private lives most of us have confronted the stress of an unresolved ledger inconsistency – be it fraudulent charges to our credit cards, disputes with our health care provider, mismanaged car title transfers (that was my latest one, so I am throwing it in) … and don’t we always feel we are fighting a slow-moving, archaic and arbitrary system? That’s what un-synchronized ledgers feel like in a digital age business process, too. Blockchain technology can ease the pain.

So, the way to think about this conundrum is as a layered architecture: Individual, protected and privately-held ledgers, augmented by a Blockchain-powered intra- or inter-enterprise bus that establishes, secures and provides full trace-ability when it comes to ledger synchronization between participants. Both layers deliver business value, but business value is maximized if their individual strengths are aligned as a design pattern to power business processes for the digital enterprise.

In a nutshell: Of course, database technology is here to stay. And database and blockchain technology are entirely symbiotic. Database technology benefits from being augmented with Blockchain as an “inter-ledger synchronization bus” in order to deliver on the needs of business processes in the digital age.

If you are asking yourself: “Well, this makes perfect sense – so what’s stopping enterprises from doing this right away?”, the answer is: It is not easy to build the expertise and the integrated solution required to augment your existing enterprise database ledgers with Blockchain technology. The barrier to entry can be dramatically lowered via abstractions and re-usability.

BCware recognized this early on. Hence, enterprises do not have to become Blockchain experts, with BCware’s solution they just take advantage of an abstracted Blockchain infrastructure to drive faster business outcomes, with total transparency and security.

Visit on LinkedIn and let’s brainstorm how BCware’s Enterprise-Grade Blockchain solution can power your own business processes more effectively, driving faster results while reducing cost and risk.