Saturday, 13 October 2018

Blockchain and Distributed Ledgers

Blockchain technology or distribution ledger technology revolves around an encoded and distributed database serving as a ledger where all the records of transactions are stored. Blockchain technology uses the core blockchain as an innovative database approach with a data model where digital token is utilized in each transaction update and verification's which has become possible across the specific blockchain network depending on the goal and the stakeholders. Blockchain technology and distributed ledger technology in practice is beyond the virtual currencies how blockchain works, applications, evolution, networks and business reality. 

People often confuse Blockchain technology with distributed ledgers. But one needs to understand that blockchain is a type of Distributed Ledger Technology. 

Blockchain vs Distributed Ledger Technology

A distributed ledger is a database which is spread across several nodes and computing devices. Each and every node saves and replicates an exact same copy of the ledger. Each node of the network updates itself independently. One of the most striking features of the blockchain technology is that the ledger is not maintained by any central authority and the whenever an update is needed, it is independently constructed and done by each node. The nodes vote on these updates for ensuring that the majority of the people agree with the conclusion. This voting agreement on a copy is known as consensus.

Consensus is an automated process which is conducted automatically by a consensus algorithm.  

Thus the distributed ledgers use separate computers for recording, sharing and synchronizing transactions in their respective electronic ledgers. Blockchain organizes data into blocks which are then chained together in an append mode. 
All distributed ledgers do not employ a chain of blocks for providing a secure and valid distributed consensus.  A blockchain is essentially managed by peer-to-peer networks. The data quality of the blockchain can be maintained by database replication and computational trust.

Hence it can be concluded that every blockchain is a distributed ledger but every distributed ledger is not a blockchain.

1 comment:

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