Blockchain and Distributed Ledger System
A blockchain is a term that comes to many things to many people. For developers it is a set of protocols in encryption technologies for securely storing data on a distributed network. For business and finance, it is the distributed ledger technology for explosion of new digital currencies. For technologist it is the driving force behind the next generation internet and for other the technology is being used in eliminating the middle man from the transactions taking place between two parties. A blockchain network is a decentralized and a distributed network where all the transaction and events are validated and secured by all the parties involved in the network. A blockchain network provides high level of security for the users of the network as all the transactions occurring in the network are completely anonymous to the users. This feature of blockchain is making the technology being used in various organizations and different sectors. The technology came into light in year 2008 when satoshinakamoto gave the concept of cryptocurrencies and idea was implemented in 2009. Cryptocurrency has become a very well-known currency in various industry and organizations.
A distributed ledger is also known as a shared ledger or distributed ledger technology. A distributed ledger is a kind of database of replicated, shared data that is geographically spread across several numbers of nodes, sites countries or institution. There is no central authority present in a distributed ledger system and each node present updates their own database independently. A distributed ledger system work on a peer-to-peer network with some consensus algorithm where it ensures the replication process between the nodes. A distributed ledger system can be categorized as either a permissioned or permissionless ledger, depending upon whether the users of the distributed ledgers can be accessed by anyone or only some desired participating node can access the ledger. Many organizations are investing huge amount in distributed ledger technology as it is cost saving measure and, in some way, or other reduce the risk involved in their operations.
A blockchain technology is one form of distributed ledger technology (DLT) but it is not necessary that a distributed ledger system employs a chain of blocks in order to successfully provide a secure distributed ledger. Thus, blockchain technology with the concept of distributed ledger system can provide security and protect the integrity of the systems in a decentralized network that consists of anonymous participants without any need of trust between organizations.