Distributed Ledger Technology (DLT) widely known as “blockchain” is the technology behind distributed databases that are secured by cryptography and synchronized across multiple sites, institutions or geographies. Transactions have multiple public “witnesses” which make cyber attacks very difficult and each node participates in the network. Those nodes have their own identical copy of the blockchain and have equal access to what’s recorded. Distributed ledgers are also near impossible to take down because there is no single fail point that will compromise the network. Literally all the nodes have to shut down within the same time period, which is highly unlikely.
Further, any changes or additions made to the ledger are reflected and copied to all participants in a matter of seconds or minutes. Underlying the distributed
In a nutshell, all cryptocurrencies have a public ledger of data that is maintained by witnesses or nodes. That ledger is verified by users/computers running software and the data is permanently recorded in sequential time-stamped blocks or recorded using cryptographic hashes. This encryption allows the public ledger to be true and transparent because the nodes have reached consensus and found the transaction, or whatever the smart contract allowed, to be correct. All committed transactions can be found on the block explorer and in a trustless environment.
DLT, decentralized and distributed database protocol, hash-based distributed timestamp server technology is the underlying technology that makes Bitcoin and Ethereum work as they do. Bitcoin’s blockchain is one example of how DLT applies to a digital asset, but there is so much more than just cryptocurrency happening on a DLT.
Distributed Ledgers can double as is a place to store executable programs and their data. Ethereum’s smart contracts utilize the Ethereum ledger in this way. So, not only can a public record be kept, but trustless programs can be used alongside the ledger to create what is essentially a distributed and decentralized computer! Bitcoin and Ethereum are only two of many crypto communities that have been in development.
Distributed ledger technology and smart contracts generally thrive in the cloud and many projects are open source to provide opportunities for developers to build DApps or work out bugs in the system. Oftentimes there are bounties for finding problems because essentially, everyone wants a safe and secure environment for their information.
As this new technology emerges and evolves, more businesses and people will adopt it into their everyday lives and work flows. In the meantime, DLT applications will likely be incremental as there is a learning curve and needed time to acclimate to the changes that a DLT can bring. Certainly, moving from manual and inefficient protocols and paper trails is soon to be a thing of the past. Tasks such as reference data maintenance in payment and settlement systems, trade finance, syndicated loans, and tracking provenance of agricultural products and commodities, their subsequent sale or use as financing collateral, will all be taken care of with blockchain technology. With so many possibilities, it would be in everyone’s best interest to learn more about distributed ledger technology and how it could help core applications in your work and personal life.
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