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Distributed ledger

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A distributed ledger (also called a shared ledger, or Distributed Ledger Technology, DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.[1] There is no central administrator or centralized data storage.[2]

A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken.[2] One form of distributed ledger design is the blockchain system, which can be either public or private.

Distributed Ledger

The distributed ledger database is spread across several nodes (devices) on a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently. The primary advantage is the lack of central authority. When a ledger update happens, each node constructs the new transaction, and then the nodes vote by consensus algorithm on which copy is correct. Once a consensus has been determined, all the other nodes update themselves with the new, correct copy of the ledger. [3][4] Security is accomplished through cryptographic keys and signatures. [5][6][7]

Applications

In 2016, some banks tested distributed ledgers for payments [8] to see if investing in distributed ledgers is supported by their usefulness.[2]

Types

Distributed ledgers may be permissioned or permissionless regarding if anyone or only approved people can run a node to validate transactions.[9] They also vary between the consensus algorithm. (Proof of Work, Proof of Stake, or Voting systems). They may also be mineable (you can claim ownership of new coins contributing with a node) or not mineable (the creator of the cryptocurrency owns all at the beginning).

See also

References

  1. ^ Distributed Ledger Technology: beyond block chain (PDF) (Report). UK Government, Office for Science. January 2016. Retrieved 29 August 2016.
  2. ^ a b c Scardovi, Claudio (2016). Restructuring and Innovation in Banking. Springer. p. 36. ISBN 9783319402048. Retrieved 21 November 2016.
  3. ^ Maull, Roger; Godsiff, Phil; Mulligan, Catherine; Brown, Alan; Kewell, Beth (21 Sep 2017). "Distributed ledger technology: Applications and implications". FINRA. Retrieved 25 September 2018.
  4. ^ Ray, Shaan. "The Difference Between Blockchains & Distributed Ledger Technology". Towards Data Science. Retrieved 25 September 2018.
  5. ^ UK Government Chief Scientific Advisor. "Distributed Ledger Technology: beyond block chain". Gov.uk. UK Government. Retrieved 25 September 2018. {{cite web}}: |last1= has generic name (help)
  6. ^ Brakeville, Sloane; Perepa, Bhargav (18 Mar 2018). "Blockchain basics: Introduction to distributed ledgers". IBM Developer. IBM. Retrieved 25 Sep 2018.
  7. ^ Rutland, Emily. "Blockchain Byte" (PDF). FINRA. R3 Research. p. 2. Retrieved 25 September 2018.
  8. ^ "Central banks look to the future of money with blockchain technology trial". Australian Financial Review. Fairfax Media Publications. 21 November 2016. Retrieved 7 December 2016.
  9. ^ "Blockchains & Distributed Ledger Technologies". Blockchain Hub. {{cite web}}: |access-date= requires |url= (help); Missing or empty |url= (help)
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