Blockchain and Distributed
Ledger Technology (DLT)
Blockchain and Distributed Ledger Technology (DLT)
A blockchain is a digital ledger of transactions that are
distributed across the entire network of computers (or
nodes) on the blockchain.
Distributed ledgers use independent nodes to record, share,
and synchronize transactions in their respective electronic
ledgers instead of keeping them in one centralized server.
A blockchain uses several technologies like digital
signatures, distributed networks, and encryption/
decryption methods including distributed ledger technology
to enable blockchain applications.
Blockchain and Distributed Ledger Technology (DLT)
Blockchain is one of the types of DLT in which transactions
are recorded with an unchangeable cryptographic signature
called a hash.
That is why distributed ledgers are often called blockchains.
What is Distributed Ledger Technology (DLT)?
Distributed Ledger Technology (DLT) is centered around an
encoded and distributed database where records regarding
transactions are stored.
A distributed ledger is a database that is spread across
various computers, nodes, institutions, or countries
accessible by multiple people around the globe.
Distributed Ledger Technology (DLT)
Features:
Decentralized: It is a decentralized technology and every
node will maintain the ledger, and if any data changes
happen, the ledger will get updated.
The process of updating takes place independently at each
node.
Even small updates or changes made to the ledger are
reflected and the history of that change is sent to all
participants in a matter of seconds.
Distributed Ledger Technology (DLT)
Features:
Immutable: Distributed ledger uses cryptography to create
a secure database in which data once stored cannot be
altered or changed.
Append only: Distributed ledgers are append-only in
comparison to the traditional database where data can be
altered.
Distributed Ledger Technology (DLT)
Features:
Distributed: In this technology, there is no central server or
authority managing the database, which makes the
technology transparent.
To counter the weaknesses of having one ledger to rule all,
So that there is no one authoritative copy and have specific
rules around changing them.
This would make the system much more transparent and
will make it a more decentralized authority
Distributed Ledger Technology (DLT)
Features:
In this process, every node or contributor of the ledger will
try to verify the transactions with the various consensus
algorithms or voting.
the voting or participation of all the nodes depends on the
rules of that ledger.
In the case of bitcoin, the Proof of Work consensus
mechanism is used for the participation of each node.
Distributed Ledger Technology (DLT)
Features:
Shared: The distributed ledger is not associated with any
single entity. It is shared among the nodes on the network
where some nodes have a full copy of the ledger while
some nodes have only the necessary information that is
required to make them functional and efficient.
Smart Contracts: Distributed ledgers can be programmed to
execute smart contracts, which are self-executing contracts
with the terms of the agreement between buyer and seller
being directly written into lines of code. This allows for
transactions to be automated, secure, and transparent.
Distributed Ledger Technology (DLT)
Features:
Security: Distributed ledgers are highly secure because of
their cryptographic nature.
Every transaction is recorded with a cryptographic signature
that ensures that it cannot be altered.
This makes the technology highly secure and resistant to
fraud.
