Distributed Ledger vs. Blockchain Technology: Do You Know the Difference?
Blockchain is increasing in popularity because of bitcoin and other cryptocurrencies. Many traditional centralized bodies such as governments and banks are starting to take an interest in blockchain technology.
A new term that is starting to make waves in the cryptocurrency space is the distributed ledger technology. However, many people usually confuse distributed ledger with blockchain and vice versa. In this article, we will highlight everything you need to know about distributed ledger vs. blockchain.
What Is a Distributed Ledger?
A distributed ledger is a database that can be found across several locations or among multiple participants. However, most companies still use a centralized database with a fixed location. Unlike a centralized database, a distributed ledger is decentralized, which helps to remove the need for a central authority or intermediary for processing, validating, or authenticating transactions.
Furthermore, these records will only be stored in the ledger after the parties involved have reached a consensus.
What Is Blockchain?
A blockchain is a form of distributed ledger that has a specific technological underpinning. Blockchain creates an unchangeable ledger of records maintained by a decentralized network after a consensus approves all the records.
The significant difference between blockchain and DLT is the cryptographic signing and linking groups of records in the ledger that forms a chain. Furthermore, there is a chance for the public and users to determine how a blockchain is structured and run based on the specific application of blockchain.