Distributed Ledger Technology Role in Blockchain?
Blockchain is becoming more popular with each passing day. Entities like banks and government organizations are seeing the potential in this technology and working on new and creative ways to implement it to lay the foundation of a better world. However, there is one term that’s frequently thrown around in the industry, which is distributed ledger technology. So, what is it?
Distributed Ledger Technology Explained
Distributed Ledger Technology is a database system that comprises records that aren’t stored or controlled by a central authority. It’s also a decentralized system that’s based on the consensus principles of the blockchain technology. In its practical application, the ledger is stored in various servers across the network. These servers that are also called “nodes” communicate with each other and ensure an accurate and up-to-date record of transactions. This is because all the nodes share the same ledger and if anyone tries to tamper with the data, the mismatch can be immediately identified by comparing the ledger with other ledgers on the network. This is the power of the distributed ledger technology.
If you want to understand blockchain, then you should understand distributed ledger technology first. This is because blockchain itself is a form of distributed ledger technology. On the blockchain network, there are a large number of records that are maintained by a decentralized network and are approved by a consensus system. What sets blockchain apart from the distributed ledger technology is linkage of groups of records on a ledger and cryptographic signing.
