Datomic is a database that uses an immutable data model where data is never updated or erased, only added to over time. It uses distributed transactions where transactions are processed serially by transactors and changes are transmitted to peers. Peers cache data and submit transactions, handling queries using a merged view of the cache and latest data from the transactor. The data model consists of immutable datoms that are entities, attributes, values, and the transaction time, allowing queries over time.