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Data immutability is the idea that information within a database cannot be deleted or changed. In immutable—or append-only—databases, data can only ever be added. Meaning the database will not overwrite or change an item when new information is made available. Even if a mistake is made, it is corrected with a subsequent entry and not overwritten.
To change or delete an entry in an immutable database, a new entry must be created and the old entry must be marked as belonging to a previous version of the database. That way, all history of how a database became the present state is preserved. This makes auditing data changes possible because the audit log is tamper-resistant. (The opposite of an immutable database is a mutable database, wherein the information stored in the database can be overwritten, changed, or deleted.)
How Does Data Immutability Work?
One way to think about data immutability in the “real world” is through medical records. Medical records keep track of all the different procedures, tests, appointments, prescriptions, and so on in a person’s medical history. As a person seeks medical care for different conditions and illnesses, their medical records are updated. When a person gets a new prescription, their old prescriptions are not overwritten or removed from their medical records. Rather, their medical records are updated to reflect both the new prescription and the old ones. In this way, medical records are immutable.
For businesses using a general ledger and double-entry accounting, data immutability is also a particularly significant concept. Every business needs a ledger for bookkeeping. A ledger provides a record of each debit and credit transaction across the lifespan of a company and the total of all of the different debit and credit entries must balance out. Companies that move money at scale will generally use what’s known as a ledger database to record financial transactions and store other significant business data.
Within a double-entry system, accountants can generally look back at transactions within their ledger and reverse-engineer any discrepancies that have happened. However, if the data is not immutable and has been changed, it becomes impossible to figure out what has gone wrong in the case of an inconsistency within the ledger. That’s why it is particularly important for businesses to ensure that the data within their double-entry ledger is immutable.
To learn more about Data Immutability, check out these additional resources:
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Ledgers are foundational to any company that moves money at scale. Explore the accounting fundamentals behind the ledgering process, the differences between application ledgers and general ledgers, and more.
A Ledger Database is a database that stores accounting data. More specifically, a ledger database can store the current and historical value of a company’s financial data.
Pessimistic locking and optimistic locking are types of concurrency controls designed to handle concurrent updates in a ledger system, helping prevent race conditions and maintain immutability in financial ledgers.
Learn the difference between Single-Entry Accounting and Double-Entry Accounting
Data immutability is the idea that information within a database cannot be deleted or changed. In immutable—or append-only—databases, data can only ever be added.
GAAP, or Generally Accepted Accounting Principles, is the US system for preparing financial statements. It lays out the rules for how companies measure, present, and disclose their financial performance. The goal is to make reports reliable and easy to compare across businesses.
ACID stands for Atomicity, Consistency, Isolation, and Durability—the four rules that keep database transactions running smoothly. Together, they ensure every transaction is reliable, predictable, accurate, and intact.
Every Account in a double-entry ledger is categorized as debit normal or credit normal. Debit-Normal Accounts represent uses of funds (assets, expenses); Credit-Normal Accounts represent sources of funds (liabilities, equity, revenue).
Balance caching means storing the latest known account balance outside the core ledger for faster reads.
In the context of software, concurrency control is the ability for different parts of a program or algorithm to complete simultaneously without conflict. Concurrency controls in a database ensure that simultaneous transactions will be parsed appropriately.
Cryptographic immutability is a powerful tool for securing data, which requires encryption methods on each transaction to guarantee immutability. It’s often used for blockchains and distributed ledger systems to mitigate fraud.
An API call is idempotent if it has the same result, regardless of how many times it is applied. Inadvertent duplicate API calls can cause unintended consequences for a business, idempotency helps provide protection against that.
Sharding means dividing your database into horizontal partitions, called shards, which can each store a subset of data. to reduce latency; this often happens when data scales. Within a ledger, sharding is used to split transactions or accounts so that each shard holds a portion of the total ledger.
A chart of accounts (COA) is an index of all the different accounts within a company’s ledger.
A digital wallet (also sometimes called an electronic wallet) is an application that securely stores digital payment information and password data for a user.
A ledger API allows companies who need to move money at scale quickly and easily access, track, audit, and unify all of their financial data in one place.
The ledger balance, also called the current balance, is the opening amount of money in any checking account every morning. The ledger balance should remain the same for the duration of the day.
A ledger (also called a general ledger, accounting ledger, or financial ledger) is a record-keeping system for a company’s financial transaction data.
A subsidiary ledger is used to keep track of the details for a specific control account within a company’s general ledger.