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Blockchain Technology

Blockchain and Distributed Ledger Technology

Posted November 25, 2022 Gyan Prakash
Distributed Ledger Technology


A blockchain is a digital ledger of transactions, distributed across the nodes. Distributed ledgers use independent nodes to record, share, and synchronize transactions in their respective electronic ledgers instead of keeping them in one centralized server. Blockchain is one of the types of DLT which records transactions with an unchangeable cryptographic signature called hash. In conclusion, distributed ledgers are often called blockchains.

Distributed Ledger Technology (DLT) is one of the core innovation that bitcoin and other crypto currencies are put up on. A ledger is a record of a financial statement that collects all the data about the transactions that happen on the network. The bitcoin ledger is also public and permission less, which identifies that a person can access it. Here we will come to know what actually distributed ledger technology is, its features, and its forms. And, how will it help in eliminating the failures of centralized systems by establishing decentralized technology?

What Distributed Ledger Technology (DLT) is?

It is an immutable system, which means no one can control or modify it without the consent of those that are securing the network. This technology is well thought-out to be revolutionary because it can scatter or alter the way that many businesses, industries, and even governments operate because we can now exchange data and value short of the need for trusted third parties.

A blockchain is a distributed digital ledger of transactions throughout the nodes. Thus, a distributed ledger database spread across many computers, institutions, nodes, or countries accessible by multiple people around the world.

Distributed Ledger Technology

How can DLT replace traditional methods?

Distributed Ledger Technology (DLT) can effectively enhance the traditional method by modifying and updating fundamental methods of managing, sharing and collecting data in the ledger. This type of system needs a high level of computing resources and labour to maintain ledger and contains many forms of failures.

However, Distributed ledger technology permits real-time sharing of data and provides transparency. It helps in abolishing the single point of failures which prevents the data recorded in ledgers from manipulation.

Classifications of distributed ledger technology:

Permissioned DLT:

Permissioned DLTs are closed blockchain networks, nodes have to take permission from a central authority to access or make any changes in the network. They maintain an access control layer in order to allow certain identifiable participants to perform specific tasks. Permissioned DLTs are governed by the organization and there is a private group that authorizes decisions and appoints members of the business network. The level of transparency in such a network depends on the goal of the organization using it.

Permissionless DLT:

Permissionless DLTs are open networks available for anyone to join, also known as trust less or public blockchain. In such networks, a user can generate a private address and then interact with the network. Given their open-source protocols, they ensure full transparency of transactions. Permissionless DLTs are suitable for the organization and managing digital currencies.

Hybrid DLT:

Hybrid DLTs are a combination of both permission and permissionless DLTs and benefit in both ways.

Types of Distributed Ledger Technology


Features of distributed ledger technology:


It is decentralized technology where every node maintains the ledger, and if any changes occur, the ledger gets updated. In case of changes, the updated records will be sent to all members of the chain within a couple of seconds.


Decentralized networks use cryptographic techniques to store the data and create a secure database. Hence, it becomes very difficult to change the stored data.


In this system, there is no central server or authority manager to store the database which leads to transparency. In this, every node of the ledger verifies the transaction with various algorithms and voting.


This ledger or organization is not under any single entity. Some nodes have a full copy of the data while some nodes have only the important information in them.

How useful distributed ledger is?

DLTs describe digital databases in which every member can supplement the data stored there; not centrally in the cloud, but locally on each computer on the network. It is functioning as a decentred peer-to-peer network. It has the potential to recolonize sectors such as banking, healthcare, supply chain management, and governance.

The decentralized consensus mechanisms implemented through algorithms on the participating computers. This verifies the data in the decentred network which makes DLTs transparent, safe, and by that the backbone for future transactions and verifications processes. The members check the new information using a consensus protocol before it is in-corporate as a block within the chain and becomes immutable. And it provides the best-known consensus mechanisms and uses the computing capacity of members to validate the transactions. However, this effort is a part of the secure consensus protocol’s design and protects the network from manipulation as it renders attacks uneconomic. At the same time it provides more flexible ways to secure the consensus for safety requirements.


In general Blockchain and Distributed Ledger Technology are considered as same, but there are some differences between these two technologies. Blockchain can be classified as a type of Distributed Ledger Technology. We can say that Blockchain is a type of DLT, but every Distributed Ledger can not be called a blockchain. Distributed Ledger Technology has the potential to impact problems of financial or banking, cyber security, healthcare, government, data security, etc. sectors with effective solutions. Also, it ensures transparency, security, and trust in the various kinds of transactions involving digital assets. However, distributed ledger technology makes a ledger in a decentralized way.

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