What is Distributed Ledger Technology?
Distributed Ledger Technology (DLT) is a type of database system in which data is stored across a network of computers, rather than in a central location. This decentralized approach allows for greater transparency and security, as well as the ability for multiple parties to access and update the information stored on the ledger.
One of the most very well-known example of Distributed Ledger Technology (DLT) is blockchain, which is the technology behind cryptocurrencies like Bitcoin.
What is Distributed Ledger Technology in Blockchain?
Blockchain is a type of Distributed Ledger Technology. In simple terms, Blockchain is a subset of Distributed Ledger or Distributed Ledger is a Superset of Blockchain.
Distributed Ledger are the type of databases that are shared, replicated and synchronized between a large number of participants that spread across the globe through a network. Distributed Ledger Technology does not contain any block of chains. Where talking about blockchain, Blockchain is simply a sequence of blocks. Blockchain needs a proof of work. Whereas Distributed Ledger does not need a proof of work as blockchain.
All Blockchain are distributed Ledgers, but all the Distributed ledgers are not blockchains.
Blockchain 2.0 Distributed Ledger is developed on Ethereum Virtual Machine Code Generators for smart contracts by using the programming language called Solidity. Solidity is a programming language designed for developing smart contracts that run on Ethereum Dagger Hash Algorithm and works on Ethereum protocol.
Distributed Ledger Technology vs Blockchain
Most of the organizations or companies use the term as Distributed Ledger Technology (DLT) and blockchain interchangeably, but these terms are not the same. Well, Distributed Ledger Technology (DLT) is a tree and blockchain is an extending branch of this tree. The roots of delts are much older than blockchain technology.
Now you may wonder what DLT, actually, as in simple words, distributed Ledger technologies are the type of databases. That is shared, replicated and synchronised between a large number of participants that are spread across geographies. One makes any changes or additions to your Google doc file. It gets reflected on everyone's copy of that Google Doc who has access to that shared document.
Similarly, if you make any changes over a distributed Ledger, it gets reflected and copied to all participants in a matter of seconds or minutes. The difference lies in the name of blockchain. Blockchain essentially, as a chain of verified blocks of transactions, while distributed ledgers do not require such a chain. All blockchains are distributed ledgers, but not all distributed ledgers are blockchains.
Distributed Ledger Technology Scope
The scope of distributed ledger technology (DLT) is quite broad and it has the potential to be applied in various industries.
Some of the key areas where DLT is being explored include:
- Finance: DLT can be used to improve the efficiency and security of financial transactions, such as in the trading of stocks, bonds, and other financial assets.
- Supply Chain Management: DLT can be used to track the movement of goods and materials throughout the supply chain, allowing for greater transparency and efficiency in logistics and inventory management.
- Healthcare: DLT can be used to securely store and share patient medical records, allowing for better coordination of care among healthcare providers.
- Internet of Things (IoT): DLT can be used to securely and transparently track the movement and status of connected devices, such as in smart homes, factories and transportation.
- Digital Identity: DLT can be used to create digital identities that can be authenticated and verified in a secure and decentralized manner.
- Government: DLT can be used for voting systems, land registry, public record keeping and many more.
I conclude that Distributed Ledger and Blockchain are not the same. They both are different in technology.