Nowadays blockchain technology seems to create a lot of buzz. As much of this wide range of blockchain technology has made our jaws drop, people often use the term distributed ledger instead of the blockchain. But are blockchain and distributed ledger the same thing?
Let’s dive a little deeper and find out how they really work and whether blockchain and distributed ledger are the same things or not?
What is Distributed Ledger Platform?
Distributed ledger platform or technology is one kind of database that uses nodes or other computing systems to store the data. Every node on the network saves up an exact copy of the ledger.
Also, every node updates all the information independently.
Pretty cool, right?
The most exciting part is that everything in distributed ledger platform isn’t depended on any central authority system. Every update of the system is recorded individually and then updated by the node, itself.
After gaining all the info, they vote to make sure every node has the majority agreement. After a making a specific decision, these nodes then update the ledger with the new version. This type of ledger system help to terminate any negative side of trust.
As these nodes are independent, you won’t have to depend on higher authorities such as the governments, banks or lawyers.
This awesome ledger platform introduces a new type of solution to centralized systems. This could be the start of a new revolution!
What Is Blockchain Technology?
Well, blockchains are actually a type of distributed ledger platform. What happens here is that the nodes form a chain for adding up an extra layer of security and accuracy.
A peer-to-peer network system manages a blockchain technology. As its one kind of distributed ledger system, it can exist without any centralized authority or server, maintaining it. So, here the data would depend on the computational integrity and replication process of the nodes.
That being said, the structure of blockchain is what makes it so unique. Every data on this ledger system is stored in a block and grouped by the nodes. Then these data blocks are interlinked with each other and later secured by using some form of cryptography.
Thus, it’s a growing list of data records. No one can delete or alter previously stored data blocks, and that stays that way. If any system failure occurs, which is typically non-existence, the nodes bounce back and use the previously stored data to manage the losses.
That’s why tracking the events or managing the system becomes much more relaxed in this type of distributed ledger system.
Bitcoin, the golden jewel of cryptocurrency, was the pioneer of this tech and then was later developed and used in many other cryptocurrencies.
So, if you are wondering why cryptocurrencies are so mainstream, this is the actual answer.
What’s the Advantage: Blockchain explained
The tech is by far one of the most robust systems. You’ll have a hard time breaching this much security. Obviously, no one can provide that 100% security level, but blockchain help to minimize abuse to a great extent.
The structure is so secure that you can even process financial records without any worries. The new blockchain technology is giving the companies a modern way to deal with their banking problems without the extra pain of paperwork.
Blockchain will make sure that financial transaction happens without the operational inefficiencies. This process ultimately saves loads of money. This is the ultimate reason for you to use blockchain technology.
Blockchain and Distributed Ledger: Is There Anything beyond Blockchain?
Well, blockchain may be a popular distributed ledger system, but it’s not the only one. Many people are now taking it up a notch and inventing loads of other efficient distributed ledger technologies to beat blockchain.
The best way to get new and improved DLT is collaboration. As most of the blockchain tech is open sourced, people are free to use the codes and tweak it up to make it even more efficient.
That day is not far when DLTs will become the ultimate standard and companies will use it to process their financial or even other aspects of businesses.
In The End,
So, the main difference between blockchain and distributed ledger is the internal structure system. All blockchain technologies are a form of the distributed ledger, but not all the distributed ledger systems are blockchain.
Every distributed channel is different and depends mostly on the behavior of the nodes.
Call it, distributed ledger or blockchain, but they are undoubtedly the evolution everyone has been waiting eagerly.