Event sourcing stores state changes instead of current state:
Traditional: Store current balance: $100. Update in place.
Event sourced: Store events: Deposit 30, Deposit $80. Replay to get current state.
Benefits:
- Complete audit trail
- Rebuild state at any point in time
- Debug by replaying events
Challenges:
- Event schema evolution
- Replay can be slow
- Snapshots needed for performance
Good for financial systems, collaborative editing, and anywhere audit trails matter.