Using a transaction log can provide data protection, and can dramatically improve the performance of SQL Anywhere.
When operating without a transaction log, SQL Anywhere performs a checkpoint at the end of every transaction which consumes considerable resources.
When operating with a transaction log, SQL Anywhere only writes notes detailing the changes as they occur. It can choose to write the new database pages all at once, at the most efficient time. Checkpoints make sure information enters the database file, and that it is consistent and up to date.
You can further improve performance if you store the transaction log on a different physical device than the one containing the primary database file. The extra drive head does not generally have to seek to get to the end of the transaction log.
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