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Yes, for very small or embedded, single-purpose systems sqlite is usually a good choice. It's very well tested, and there's nothing extra to run or manage. But be careful if the system starts growing beyond that, you'll want a real RDBMS before you abuse sqlite too much.
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Depends on what you mean by "small" and "growing".

If you mean database size, SQLite can handle massive amounts of data. I've seen 281 TB quoted as theoretical max size.

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