What Is a Relational Database?
A relational database is a type of database that stores and provides access to data points that are related to one another. It organizes data into one or more tables (or "relations") of rows and columns, where each row represents a record and each column represents an attribute. This structured approach falls under the broader category of data management within financial technology, enabling efficient storage, retrieval, and manipulation of information. The relational model allows for the creation of predefined relationships between these tables, which is crucial for maintaining data integrity and consistency across a dataset. A key characteristic of a relational database is its ability to link data across multiple tables based on common fields, providing a flexible yet robust framework for complex data sets.
History and Origin
The concept of the relational database was first introduced by Edgar F. Codd, an IBM computer scientist, in his seminal 1970 paper, "A Relational Model of Data for Large Shared Data Banks."43,42,41,40 Before Codd's work, databases often used rigid hierarchical or network structures that made data access complex and program-dependent.39 Codd's revolutionary idea proposed that data should be stored independently from the physical machine representation and accessed using a non-procedural language, simplifying how users interact with the data.38,37 This groundbreaking model, rooted in mathematical set theory, provided a more flexible and user-friendly way to manage large volumes of information.36,35 The advent of the relational model paved the way for modern database management system software, which became the industry standard in the 1980s and 1990s.34
Key Takeaways
- A relational database organizes data into tables with rows and columns, establishing relationships between them through common fields.
- Edgar F. Codd developed the relational model in 1970, revolutionizing data storage and retrieval.
- Data is accessed and manipulated using Structured Query Language (SQL), a powerful and widely adopted standard.
- The ACID properties (Atomicity, Consistency, Isolation, Durability) are fundamental to ensuring the reliability of transactions in relational databases.
- Relational databases are widely used across industries, including finance, for their ability to manage structured data with high integrity.
Formula and Calculation
While a relational database does not have a "formula" in the mathematical sense of a single equation, its operations are based on relational algebra and relational calculus, which are theoretical foundations for data manipulation. These foundational operations allow for the retrieval and combination of data from multiple tables.
One of the core operations is the JOIN operation, which combines rows from two or more tables based on a related column between them. For instance, to combine information about customers and their orders, a join operation would use a common CustomerID field.
The general conceptual form for a JOIN operation using Structured Query Language (SQL) is: