What is distributed ledger technology? What is a Blockchain ledger? How does a distributed ledger work? What is Blockchain DLT?
Whenever we made any payment or receive any cash then we make a record of it. We use different ledger books to hold the record of our transactions. From ancient times humans tend to hold their financial records in different forms. In older times we used to write manually in books called ledgers and with the advancement of technology Computers took the place of these written books. But now it is the era of Digital currencies then we need a strong technique to hold the transaction record of multiple nodes. And this demand gave birth to DLT(Distributed Ledger Technique). If you are not familiar with distributed ledger technology and you want to know then you are in exact place. Here I will describe what is this technology and how it works?
Distributed Ledger Technology
If you are a crypto enthusiastic and want to invest in digital coins then you should aware of the DLT because it is the need for every transaction. Distributed ledger technology is a digital process to track the transactions of digital assets and all the details are recorded in multiple places. There is no central database or authority to store the data that’s why it is called distributed technology. Each record constructed by every node. Like this every system on the system functions every transaction and they make results on its basis. Every user have to agree with each other conclusion because they know exactly about every transaction.
Distributed ledgers are utilized to record static data, transactions, registry and much more. This is the revolution over paper based ledgers and you don’t need to maintain any third party ledger. It also vanish the need of lawyers, banks, compliance officers etc. This ledger is the revolutionary invention in terms of gathering information and communication. The progress of global trade and e commerce are the main reasons behind the creation of these networks. One of the most profitable thing of distributed ledger technology is that everyone is responsible for it. As a result we get transparent, instant, and pure transaction records.
How Distributed Ledger works?
Distributed ledger technology works through different nodes and all the data are recorded on multiple places. Distributed means divided and it is not controlled by any individual. All the users use their systems to record transactions. Normal currencies are issued by banks but cryptocurrencies are maintained by the group of peoples which are known as miners. All the miners refers as nodes and participate in solving different mathematical problems. Like this this ledger system functions.
Importance of Distributed ledger technology
Distributed ledger technology has removed the need of central authority and thus this can make the faster transactions. Also this technique has the ability to lessen the transaction charges. When things come in terms of security then this technology seems more secure as all the record is kept by every node. There are less possibilities of theft or manipulating data.
Another importance of this technology is that there is great transparency because every information is shared and all are the witness. The chances of any cyber attack is zero.
Cryptocurrency is the growing term and with the increasing popularity of digital coins, Distributed ledger technology has become the need of today. It is the most reliable, visible and secure medium of storing all the transaction record. Every user keeps a eye on the entire record and like this no one can manipulate the data. If you wan to know more about DLT then comments below and if you have any suggestion for us then share with us. For more crypto updates stay tuned.