Data storage in Blockchain

Data storage in Blockchain

Article by Tsaaro

7 min read

Table of Contents

Data storage in Blockchain

Technological innovation has disrupted our world. It has not only changed how we live our personal lives but also our professional lives. Most of the technological services we currently use are controlled by a concentrated majority and tend to profit off of the data we generate. There is a rising demand for a world of tech that prioritizes people and transparency in how their data is used and not profits. This has provoked and stemmed innovation to meet that objective. One such innovation is blockchain technology. It provides a permanent and non editable record of information or an “immutable ledger”. These records are stored across a number of individual nodes located in different places around the world instead of a central location. The records are broken up and stored in several places so no one entity owns the data as in our current centralized system while adding a layer of security. Though the data is distributed, because it cannot be deleted it creates a huge amount of data that needs to be stored. So how exactly does storage work in a blockchain?


Blockchain technology makes use of the unused space on hard disks of users around the world. The data can be stored “on-chain” or “off-chain”. When a transaction is logged onto a blockchain the event is logged across various nodes, it’s called on-chain data. The related information of the transaction is then stored elsewhere, it is known as off-chain data. Now blockchains can perform simple calculations and make great smart contracts but lack advanced capabilities. They still require a connection to the off-chain storage to access data but connecting a blockchain to a single API, or database would fundamentally go against its very decentralized nature. This has created an interesting problem when it comes to data storage on blockchains. 

One solution is to use oracle networks which are basically third-party solutions like Chainlink, that work as connective tissue between blockchain ledgers and data storage.


Blockchain storage vs traditional databases

Both of these deal in data storage but do it in different ways. Blockchain provides the advantage of immutability but lacks the efficiency of traditional databases. Here we provide you with a comparison of the two systems: 

  • Decentralized and immutable

Traditional databases are controlled by a single entity which requires you to trust them not to misuse your data whereas, in a blockchain network, data is distributed across devices, owned by several users, and not a single entity. Plus the information once stored on the chain cannot be deleted or edited whereas a traditional database is designed to be updated on a regular basis.

  • Security

Blockchain due to its decentralized nature is highly secure when compared to traditional databases. Encrypting files and distributing them across nodes makes it very difficult for hackers to gain access to data as only the user has the key to decrypt it. Combined with the process of sharding, which means breaking data into small pieces while distributing them across various nodes, makes it is theoretically impossible for any single node to view the complete information. If they somehow do gain access to the file, they would only be able to see a limited shard/piece of data.

  • Storage cost

Traditional storage prevents data loss by making copies of everything and storing them in a different location. This creates a large amount of duplicate data that needs to be stored and also creates a larger surface area for cyber attacks. This also means companies have to make large investments in infrastructure to store all this data. Blockchain helps solve these issues as the data cannot be deleted and distributed, preventing any data loss and infrastructure costs. This makes blockchain a significantly cheaper storage option.

  • Large files

Storage of data on-chain can be very expensive and can rack up huge costs per terabyte, with fees every time you want to access the data. They are also not very efficient or scalable in nature. This makes them very dependent on off-chain storage options. Compared to this, traditional and centralized data storage options are much cheaper and flexible in nature when it comes to storing large files.



Blockchain has the capability to disrupt how we currently use technology and the internet by changing and making things more transparent and democratic. Taking control of our data out of the hands of a select few. But when it comes to data storage, the days of it becoming mainstream and the go-to option for data storage are still far away. Especially with the high cost of on-chain data storage and inefficient solutions when it comes to off-chain storage.

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