Distributed Ledger Technology: the foundation of blockchain.

#Distributed Ledger Technology: the foundation of blockchain.

A ledger is a record-keeping system that tracks transactions, which may involve financial, academic, or land-related exchanges. Centralized ledgers are maintained on a central server. Transactions initiated by terminals are validated, fabricated, and all posted on the main server. Distributed ledgers operate on a peer-to-peer network, consisting entirely of linked nodes and collectively validate and record transactions. Let’s consider a bank transaction involving a sender and a receiver. In a distributed ledger system, all agents act as nodes on the network. Each interconnected node maintains a copy of the ledger, ensuring that the network synchronizes and validates all transactions.

Blockchains are transparent and install trust by leveraging their decentralized algorithms. Remember that all nodes in a blockchain maintain a copy of the ledger, detailing transactions that are approved or initiated by other modes on the network. If an attacker attempts to tamper with a transaction the fraudulent node would fall out of sync and be removed.

Transactions are immutability on a blockchain; changes require the creation of new transactions rather than modifying existing ones. While hashing ensures transactions are uniquely timestamped for verification. Users are identified only by a public address known as an alphanumeric string, allowing participants to interact without revealing their legal identities. Public blockchains, such as Bitcoin, are open to anyone. However, private blockchains, such as IBM’s supply chain blockchain, are restricted by authentication and validation for access. Changes on the blockchain would require a consensus of 51% of the nodes on the network, which is computationally complex. All of those contribute to a secure and trustless system.