Sourceless Blockchain – a Distributed Ledger Technology (DLT)
In a distributed ledger (DL), each node processes and verifies each article, thus generating a record of each article and creating a consensus on its veracity. A distributed ledger can be used to record static data, such as a registry, but also dynamic data, such as data transactions.
DLT refers specifically to the technological infrastructure and to the protocols that allow the access, validation and simultaneous updating of the records that characterize the distributed registers, operating on several entities or locations.
Distributed Ledger Technology uses cryptography to securely store data, cryptographic signatures, and keys to allow access only to those authorized users. Also, this technology creates an immutable database, which means that the information, once stored, cannot be deleted and any updates are permanently recorded for posterity.
This system architecture represents a significant change in the way information is collected and communicated by moving records from a single, authorized location to a decentralized system in which all relevant entities can view and modify the register. As a result, all other entities can see who is using and modifying the registry. This transparency of DLT provides a high level of trust among participants and virtually eliminates the possibility of fraudulent activities occurring in the registry.
As such, DLT eliminates the need for registry entities to rely on a trusted central authority that controls the registry or a third-party external provider to fulfill this role and act as a control against manipulation.
Blockcahain and Distributed Ledget Technology
The terms DLT and Blockchain are often used together and sometimes even interchangeably. However, they are not the same. Simply put: Blockchain is a type of DLT, but not all distributed registry technology uses blockchain technology.
This confusion is understandable, given how interest in technology has grown since the advent of Bitcoin and how interchangeable technologies can be in actual use. Both are used to create decentralized registers using cryptography. Both create immutable records that include timestamps. And both are considered almost untouchable. Both can be public by making them open for anyone to use, as is the case with Bitcoin, or they can be allowed (private) and thus restricted to authorized users who agree to certain usage standards.
The big difference between Blockcahain and DLT: Blockchain uses blocks of data that are linked together to create the distributed registry, as the name describes. But DLT also includes technologies that use other design principles to create a distributed registry. To be considered a DLT, technology does not have to structure its data in blocks.