Data is the New Gold: Use Case for Blockchain

Data is gold. If you are marketing, the most important dataset for you is your customer’s contact information.  If you are a financial officer, the most important dataset for you are financial income reports and costs. If you are an economist, the most important dataset to you is an accurate dataset of variables you will use in your economic model.

The Economist in a provocative article title is spot on:  “The world’s most valuable resource is no longer oil, but data”

Over the centuries business men and women have looked for that one thing that could build wealth.  In the mid-1800’s it was gold in California, then in the early 1900’s it was oil.  Today, after years of watching tycoons of the digital era take control of the digital age—whether it’s Microsoft or Apple, or more recently Amazon, Facebook, and Google—one thing is clear, they all rely on data. To greater extent it is now Amazon, Facebook, and Google that have move the value of data to the category of an asset, as companies and entrepreneurs race to monetize YouTube videos, clicks, and email addresses. One thing is clear, they all rely on data!

Database Defined

What is a data base? The short answer is that it is any system used to collect and keep a record of names, addresses, identifiers, critical numeric values such as dollars, measurements, and more—that is a data set. A data base management system (DBMS), is a system that holds all the records in tables, objects, or in a way that allows the DBMS manager to add, delete, create reports, or manage a database file.

Database Management Systems (DBMS)

There are a number of DBMS classifications. The most recognized DBMS is the relational database. A relational data base allows the DBMS manager to link one table to another in a way to create a new one. The relationship form one table to another is typically defined by a common link from each table.  You may recognize a relational database as SQL, MySQL Oracle, or IBM’s DB2. (Thakur, Sumit)

Another example is the Object oriented database system. This system represents data in the form of objects, such as those used in object-oriented programming.  Data and relationships are stored directly between data directly. Data is not relationally link to rows and columns. (Thakur, Sumit)

Yet another example includes the Hierarchical database. Typically used for mainframe platforms, this system stores data about the groups of parent or child relationships in the records. Data follows a series of records, and set of values attached to it. (Thakur, Sumit) It uses a “one-to-many relationship for data elements”. A tree structure is employed that links disparate data elements to a single owner, the parent of the primary record.  (Techopedia)


Blockchain for Database Management Systems

Should a company use blockchain over relational database? Blockchain’s technology uses a distributed database to store information. Its uses have been designed for use by a group of non-trusting parties. As a result, it doesn’t require a DBMS administrator. This may be an objective that meets a business need in your organization. You’ll be able to transfer value or data in a peer-to-peer ecosystem—in a way that cannot be easily shut down.

However—it’s not a good strategy if your data supports mission critical business processes, or protected data. To help answer the question—Luther Martin, in TechBeacon, offers an excellent review on how to assess relational database with blockchain.

Image Source: Blockchain dubbed web 3.0 along with its attractive decentralization is disrupting the way we handle data. Blockchain is already impacting multiple industries across the world.

Blockchain’s Disintermediation

One potential advantage of using blockchain is cost savings on DBMS in-house administrators. Administrative support is significantly reduced because you can rely on other entities—rather than administrators to administer a distributed database.

 Performance Penalty

Blockchain makes data integrity extremely reliable, and provides a mechanism to withstand data breeches and activity from nefarious actors. For those who have a high need to protect data, such as Bitcoin, this is important. However—there’s a penalty. Performance is significantly degraded.

For most relational DBMS—high performance is the most often desired feature for managing and supporting data. Especially if the data is required for mission critical business processes. While writing data to a relational database is fairly fast—writing to blockchain is intentionally hard. It is what prevents cyber-attacks.

The bottom line?  If you’re looking for high performance—the relational database may be the preferred option, and not blockchain.

The Fault-Tolerance Factor

Bitcoin has many users, each doing some of the processing for Bitcoin transactions. It creates redundancy. This high level of redundancy is what gives Bitcoin and blockchain a high degree of fault tolerance.

What does this mean for the database administrator? Data transactions and all the data is protected against disasters, or attacks from hackers. This robustness is something extremely hard to get with a relational database.

Data Security

Because of the transparent nature of blockchain, it is available for anyone to see. There is no confidentiality with blockchain. This is not practical for most businesses who need to protect their data, or for legal firms with a need to protect client confidentiality, or healthcare providers who—by law-are required to protect patient data.

This means that a very public blockchain solution may not be an appropriate option. However—it may not be necessary to store a complete record of a transaction. As an alternative, you can include a part of the data as a cryptographic hash of the record transaction. This can be used to validate a transaction and be sufficient to reconcile any disputes that might come up.

DBMS come in many forms, and there are many enterprise wide applications like MySQL or Oracle. Each requires administrators and centralized management. Data has become the new gold in the 21st Century, and as such it is an asset for anyone collecting data that needs to be protected.

“While blockchains and relational databases are both useful tools for storing information that supports critical business processes, each technology excels in different areas,” writes Martin. (Martin, Luther) He concludes there are decisive differences between the two:

      • Blockchains have a decisive advantage when it comes to providing a robust, fault-tolerant way to store critical data.
      • Relational databases seem to have a decisive advantage when it comes to performance.

A thorough evaluation of your database and DBMS objectives will clearly help you to make the best choice.



Martin, Luther, “Blockchain vs. relational database: Which is right for your application?”, TechBeacon, July 2019.

Techopedia, “Hierarchical Database”,, July 2019

Thakur, Sumit, “Types And Classification Of Database Management System”,, March 2017.

The Economist , “The world’s most valuable resource is no longer oil, but data”,, May 2017






Eric W. is a self-educated ghost writer who for the past seven years has been involved in Blockchain, Cryptocurrency, and Digital advertising sectors as Project Director, Miner, and NRA (Network Resource Application).

Contact Eric


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