Less than a decade ago, only nerds knew about the blockchain. Now even your 65-year-old mom could probably explain something to you.
If you really want to impress at a dinner party instead of making gaffes babbling on about investing in cryptocurrencies you don't really know anything about, you'll want to get down with the details.
Today we'll be covering an important concept: distributed ledger technology. What is it, how does it work, and why is it important?
Keep reading if you want to keep up with the latest in the discussions about crypto peppering the news every day.
All About Distributed Ledger Technology
DLT refers to the software or hardware architecture and protocols that enable currencies like bitcoin to work across a network that spans numerous entities and locales. It allows users simultaneous access, validation, and record updating, and all the records are immutable.
Immutable data cannot be modified. It's what keeps your currencies safe. Distributed ledger technology, introduced by bitcoin, remains central to the blockchain. However, they're not the same thing.
DLT, much like crypto, is a tech buzzword now due to its potential across businesses and sectors. You may even see ads about it during the super bowl. It has potential not only in finance, but in healthcare, education, and even sports. In a nutshell, distributed ledger technology hinges on the concept of a "decentralized" network. Industries no longer have to rely on a third party like a bank or a guarantor to store their data.
Blockchain Technology Versus DLT
The biggest gaffe you could make is confusing blockchain technology with distributed ledger technology. The two can interoperate, but they're not synonymous. Even as the crypto market tanks, we still see DLT bringing tangible value to companies.
Let's break down what the term means.
In essence, a DLT is a type of decentralized database. A centralized database would have a single point of failure or a single point of access. A decentralized database can be accessed by multiple locations or users (different entities).
All enterprises must come to a consensus for the database to update. They do not need to go to a third party that has centralized control of their database.
A blockchain is simply a type of DLT.
It is a decentralized database where new "blocks" are attached to a previous chain of transaction records. These blocks are confirmed and then encrypted before they're added to the chain.
There are also different types of blockchains that you can read about here.
More Applications for DLT
Centralized databases are more vulnerable to hackers by nature. In order for decentralized data to be compromised, hackers would have to access all of the copies of the ledger at once.
Therefore, distributed ledger technologies have great potential not just in blockchain, but elsewhere.
Experts believe DLTs could be the next big trend next to the Internet of Things.
Learn More About Blockchains
Distributed ledger technology has the potential to disrupt industries apart from finance and banking. Keep your eyes peeled for news about this technology, as it could portend an amazing investment opportunity.
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Published by super sunny