Distributed Ledger Technology
What is Distributed Ledger Technology?
A distributed ledger is a consensus of replicated, shared and synchronized digital data, dispersed across multiple institutions, locations or countries. Also referred to as shared ledger or distributed ledger technology, there is no central administrator or central data store.
A peer-to-peer network is required, as well as agreed algorithms to ensure replication across the nodes. One type of distributed ledger design is the blockchain system, either in public or private configurations.
However, this kind of ledger does not necessarily have to use a blockchain to achieve a secure, valid and distributed implementation: blockchains are just one type of data structure.
In 2016, several banks tested distributed ledger systems for making international payments.
Established banks have invested heavily in distributed ledgers as a cost-saving measure and as a way to reduce operational risks. Foreseeably, the future deployment of distributed ledgers will monetize the Internet of Things in a programmable economy.
For instance, the business start-up Everledger uses a distributed ledger system to record information about diamonds by registering several unique data points.
Distributed Ledger Technology (DLT) enables networked computers in different locations to submit data, validate transactions and update records. The term refers to the protocols and infrastructure to support real-time operation.
The idea of a distributed ledger – a collective record of activities shared across computers in distinct locations – is not a new one. Organizations with branches or offices throughout a country (or in several states) use this type of bookkeeping system.
Supermarket chains are one example. However, traditional distributed databases characteristically feature a system administrator. This person performs the functions necessary to maintain consistency between the multiple copies of the ledger.