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A distributed ledger (also called a shared ledger, or Distributed Ledger Technology, DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.[1] There is no central administrator or centralized data storage.[2]

A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken.[2] One form of distributed ledger design is the blockchain system, which can be either public or private.

Contents

Distributed LedgerEdit

The distributed ledger database is spread across several nodes (devices) on a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently. The primary advantage is the lack of central authority. When a ledger update happens, each node constructs the new transaction, and then the nodes vote by consensus algorithm on which copy is correct. Once a consensus has been determined, all the other nodes update themselves with the new, correct copy of the ledger. [3][4] Security is accomplished through cryptographic keys and signatures. [5][6][7]

ApplicationsEdit

In 2016, some banks tested distributed ledgers for payments [8] to see if investing in distributed ledgers is supported by their usefulness.[2]

TypesEdit

Distributed ledgers may be permissioned or permissionless regarding if anyone or only approved people can run a node to validate transactions.[9] They also vary between the consensus algorithm. (Proof of Work, Proof of Stake, or Voting systems). They may also be mineable (you can claim ownership of new coins contributing with a node) or not mineable (the creator of the cryptocurrency owns all at the beginning).

See alsoEdit

ReferencesEdit

  1. ^ Distributed Ledger Technology: beyond block chain (PDF) (Report). UK Government, Office for Science. January 2016. Retrieved 29 August 2016.
  2. ^ a b c Scardovi, Claudio (2016). Restructuring and Innovation in Banking. Springer. p. 36. ISBN 9783319402048. Retrieved 21 November 2016.
  3. ^ Maull, Roger; Godsiff, Phil; Mulligan, Catherine; Brown, Alan; Kewell, Beth (21 Sep 2017). "Distributed ledger technology: Applications and implications". FINRA. Retrieved 25 September 2018.
  4. ^ Ray, Shaan. "The Difference Between Blockchains & Distributed Ledger Technology". Towards Data Science. Retrieved 25 September 2018.
  5. ^ UK Government Chief Scientific Advisor. "Distributed Ledger Technology: beyond block chain". Gov.uk. UK Government. Retrieved 25 September 2018.
  6. ^ Brakeville, Sloane; Perepa, Bhargav (18 Mar 2018). "Blockchain basics: Introduction to distributed ledgers". IBM Developer. IBM. Retrieved 25 Sep 2018.
  7. ^ Rutland, Emily. "Blockchain Byte" (PDF). FINRA. R3 Research. p. 2. Retrieved 25 September 2018.
  8. ^ "Central banks look to the future of money with blockchain technology trial". Australian Financial Review. Fairfax Media Publications. 21 November 2016. Retrieved 7 December 2016.
  9. ^ "Blockchains & Distributed Ledger Technologies". Blockchain Hub. Missing or empty |url= (help); |access-date= requires |url= (help)