Distributed Ledger Technology (DLT) and Blockchain

Blockchain technology is advancing each day with the introduction of new updates, and concepts. Its wide applications and use cases in different industries are changing the face of today's world. In our previous article, we learned about the 51% attack on the Blockchain and what is it all about. You can read it here. In this article today, we are doing to understand what is distributed ledger technology and its close relation with the Blockchain. So without any further delay, let's get started with our today's topic of DLT (Distributed Ledger Technology).??

What is Distributed Ledger Technology (DLT)?

Distributed Ledger Technology is a technological infrastructure that works on a computer network speed over multiple entities and allows parallel validation, updating, and access of records referred to as distributed ledgers. The main purpose of this technology is to use cryptographic arrangements to secure the data and create an immutable database to permanently record the information. The level of transparency, interoperability, and trust bestowed by this technology changes the traditional method of storing data and also eliminates any chances of fraud or malicious activities.??

How is it different from the traditional distributed database?

In a traditional distributed database, there was a structure for a system administrator to manage and synchronize the multiple copies of the ledger. The administrator maintains a master copy of the ledger and periodically shares it with the participants and makes required updates to it. But in DLT, the technology is designed to work in the absence of a ruling central authority and it maintains a distributed database by making use of consensus mechanism-based validation & cryptographic signatures.??

Importance of Distributed Ledger Technology

DLT provides major improvements to conventional record-keeping mechanisms and completely changes the way an organization stores, access, and organizes data. Old-school data management is prone to human errors, malicious manipulations, system failure, and fraudulent activities. Also, the centralized ledgers mean data is not up to date. Furthermore, there are numerous benefits of DLT such as real-time data sharing, immutability, transparency, speedy transactions, data security, data accuracy, decentralization verification process, and much more.?

Examples of Distributed Ledger Technolgy?

Some of the most common & popular examples of DLT are as under:

• Blockchain
• Ethereum
• Tangle
• Corda, and
• Hyperledger Fabric, etc.

Benefits of Distributed Ledger Technolgy

Since the introduction of Bitcoin in the year 2009, the Distributed Ledger Technology gained popularity and is being used in varied use cases across different industries including Blockchain. It has plenty of benefits such as:

• Lower operational costs due to the elimination of central administration or any authority.
• As there is no lag in updating ledgers, it has faster transaction speed.
• Reduced risk of malicious or fraudulent activities.
• Increased reliability due to the absence of any single central point of failure.
• It provides a higher level of security and resilience.

Distributed Ledger Technolgy?& Blockchain: Similarities and Differences

Most commonly we use Blockchain and DLT interchangeably but they are not the same. In simple words, Blockchain is a type of Distributed Ledger Technology aka DLT. They have various similarities based on the fact that both:

• Are immutable and unhackable.
• Are used to create decentralized ledgers.
• Both can be permissioned (private) or public.??

But the big difference between the two is that Blockchain store its data in the block connected as a string of chains but DLT doesn't require such architecture.?

DLT: The Future it Holds

Distributed Ledger Technology has a wide future scope due to its power of changing the existing ledger management system for the greater good. We all know that the Blockchain version of DLT has powered Bitcoin for a considerable number of years.?