What is a Distributed Ledger?
What is a Distributed Ledger?
Last updated: March 26, 2017 10:38 am
Ledgers, the foundation of accounting, are as ancient as writing and money.
Their medium has been clay, wooden tally sticks (that were a fire hazard), stone, papyrus and paper. Once computers became normalized in the 1980s and ’90s, paper records were digitized, often by manual data entry.
These early digital ledgers mimicked the cataloguing and accounting of the paper-based world, and it could be said that digitization has been applied more to the logistics of paper documents rather than their creation. Paper-based institutions remain the backbone of our society: money, seals, written signatures, bills, certificates and the use of double-entry bookkeeping.
Computing power and breakthroughs in cryptography, along with the discovery and use of some new and interesting algorithms, have allowed the creation of distributed ledgers.
In its simplest form, a distributed ledger is a database held and updated independently by each participant (or node) in a large network. The distribution is unique: records are not communicated to various nodes by a central authority, but are instead independently constructed and held by every node. That is, every single node on the network processes every transaction, coming to its own conclusions and then voting on those conclusions to make certain the majority agree with the conclusions.
Once there is this consensus, the distributed ledger has been updated, and all nodes maintain their own identical copy of the ledger. This architecture allows for a new dexterity as a system of record that goes beyond being a simple database.
Distributed Ledgers are a dynamic form of media and have properties and capabilities that go far beyond static paper-based ledgers. For more on this, please read our guide “What Can a Blockchain Do?” For now, the short version is they enable us to formalize and secure new kinds of relationships in the digital world.
The gist of these new kinds of relationships is that the cost of trust (heretofore provided by notaries, lawyers, banks, regulatory compliance officers, governments, etc…) is avoided by the architecture and qualities of distributed ledgers.
Our Wikipedia analogy in our guide “What is Blockchain Technology?” hints at the power of these new kinds of relationships.
The invention of distributed ledgers represents a revolution in how information is gathered and communicated. It applies to both static data (a registry), and dynamic data (transactions). Distributed ledgers allow users to move beyond the simple custodianship of a database and divert energy to how we use, manipulate and extract value from databases — less about maintaining a database, more about managing a system of record.
Authored by Nolan Bauerle; images by Maria Kuznetsov
Article Source: http://www.coindesk.com
A Beginner’s Guide to Blockchain Technology
- Can Bitcoin Scale?
- How Bitcoin Mining Works
- How Can I Buy Bitcoins?
- How Could Blockchain Technology Change Finance?
- How do Bitcoin Transactions Work?
- How Do Ethereum Smart Contracts Work?
- How Does Blockchain Technology Work?
- How Does Cloud Mining Bitcoin Work?
- How Ethereum Mining Works
- How Ethereum Works
- How to Make a Paper Bitcoin Wallet
- How to Mine Ethereum
- How to Mine Litecoin and other Altcoins
- How to Set Up a Bitcoin Miner
- How to Store Your Bitcoins
- How to Use Ethereum
- What are Bitcoin Mining Pools?
- What are Blockchain’s Issues and Limitations?
- What Are the Applications and Use Cases of Blockchains?
- What Can a Blockchain Do?
- What Can You Buy with Bitcoin?
- What is a DAO?
- What is a Decentralized Application?
- What is a Distributed Ledger?
- What is Bitcoin?
- What is Blockchain Technology?
- What is Ether?
- What is Ethereum?
- What is SegWit?
- What is the Difference Between a Blockchain and a Database?
- What is the Difference Between Litecoin and Bitcoin?
- What is the Difference Between Public and Permissioned Blockchains?
- What is the Lightning Network?
- Who Created Ethereum?
- Who is Satoshi Nakamoto?
- Why Use a Blockchain?
- Why Use Bitcoin?
- You Can Now Get Paid (A Little) For Using Bitcoin’s Lightning Network
August 14, 2018 9:25 AM | By Jit Sutradhar
- Below $200 Billion: Crypto Market Sinks to New 2018 Low
August 14, 2018 9:15 AM | By Jit Sutradhar
- Bitcoin Price Hits 7-Month High Against Turkish Lira
August 14, 2018 9:06 AM | By Jit Sutradhar
- Korea’s Jeju Island Seeks to Become an ICO Hub Despite Domestic Ban
August 14, 2018 8:56 AM | By Jit Sutradhar
You Can Now Get Paid (A Little) For Using Bitcoin’s Lightning Network
In Rare Decision, ICO Founders Will Delay Crypto Paydays – For a Decade
Crypto Unicorn Bitmain Weighs $18 Billion IPO, One of World’s Largest
Bitcoin Dominance Rate Hits 50% For First Time in 2018
Volumes Surge on Turkey’s Crypto Exchanges as Lira Tanks