Distributed Ledger Technology(DLT): Explained

DLT is a decentralized technology, unlike the traditional centralized framework, which eliminates the trusted third party. When information is saved, it becomes unchangeable information, subject to the organization’s aspects.

What is distributed ledger technology?

DLT is a database that is completely anonymous to use. Here, lots of people will engage in the process, which will take place through the Blockchain nodes. Distributed ledger technology is in various fields but prominently plays a significant role in the blockchain industry. 

DLT is a decentralized technology, unlike the traditional centralized framework, which eliminates the trusted third party. Blockchain is a type of distributed ledger technology in which data is recorded with an unchangeable cryptographic signature known as a hash. Distributed ledger technology allows for the reliable and convenient storage of all information. When information is saved, it becomes unchangeable information, subject to the organization’s aspects.

Related: What are decentralized applications?

What are the different types of distributed ledger technology?

There are five types of DLT. They are,

1. Blockchain:

The Blockchain is a DLT in which transaction data is kept in a ledger as a sequence of blocks. DLT helps you keep your privacy by using your particular digital sign rather than your identity. 

2. Hashgraph:

In Hashgraph, multiple operations with the same time and date can be retained on the ledger. To ensure no transaction is left in the block, the authenticated nodes in the hashgraph will include both your and the other user’s transactions in the same order.

3. Directed acyclic graph:

DAG was developed as an alternative to Blockchain DLT. One of the primary benefits of DAG distributed ledger integration is the potential to provide fee-free Nano-transactions. It helps to improve the network’s scalability with size.

4. Holochain:

Holochain is the next technological era in digital ledger technology. It does not use a global consensus algorithm because Holochain-DLT has nearly infinite connectivity. Whereas Blockchain seeks to decentralize network transactions, Holochain seeks to decentralize interactions among individual nodes.

5. Tempo:

Tempo is the latest DLT version to be introduced. It is a newer feature that combines timestamping with other DLT functionalities. Tempo’s key point is that it can be utilized without change for public and private configurations.

Related: What is web3.0 crypto?

In which fields is DLT used?

First, distributed ledger technology was proposed in 2002 by Dennis Shaha and David Mazierers, but many people didn’t trust the technology. There were many drawbacks to the system. Later, in 2008, Satoshi Nakomoto used this DLT in Bitcoin, which became famous among all. Then, it was more widely used in the blockchain industry than in any other field. 

DLT changed government policies, establishments, and companies. It can assist governments with collecting taxes, passport allocation, land registration and licenses, and election laws. Finance, media and culture, diamonds and other valuable resources, and other industries benefit from this technology. 

Though Blockchain and DLT are not the same, DLT is a type of Blockchain. This distribution ledger is unchangeable at any cost, so many governments have started to implement it. It will significantly benefit the government because it can’t be deleted or altered once the data is stored. The future is more dependent on DLT technology. 

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The advantages of using DLT:

  • Security is high in DLT. Here, no one can alter or delete any stored information. Once the information is stored, it will become permanent. DLT ensures users’ privacy. 
  • No third parties are involved in distributed ledger technology. Two parties can connect directly without any intermediary. 
  • Used in multiple fields of work. There is no limit to the use of the service.
  • Cost-effective. Compared to other security services to store your data, DLT is budget-friendly.
  • The work will be finished in real-time. It will save people’s time. 

To ensure your organization’s privacy, distributed ledger technology will be the best choice. No data will be seen by third parties, and people can directly get in touch with others without reliving their identity. Security and privacy are the key roles of DLT.

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