We live in the digital age, where technological advances are emerging on a regular basis. We use gadgets on a regular basis, and occasionally exhibit signs of acute addiction and fixation with them, and when deprived, we experience severe withdrawal symptoms.
People were literally paralysed by excitement when “blockchain” entered our lives. The blockchain craze has now engulfed the whole world. Many of us know a lot about Blockchain, but have no idea what “Distributed Ledger Technology” means. In reality, they go hand in hand, yet they are vastly different.
What is Blockchain?
Blockchain is a distributed ledger technology that allows each node to have its own copy of the ledger.
To simplify, blockchain is a special type of database (database is a collection of information that is stored electronically on a computer system). But there is a difference between typical databases and Blockchain.
For starters, the storage structure differs significantly. Data is organised differently in databases and on blockchain.
The blockchain algorithm is as follows:
- A blockchain collects information in groups, often known as blocks, that store sets of information.
- There are storage options and when they are filled and connected onto a previously filled block, a data chain is formed. In reality, this is HIS MAJESTY’s blockchain.
- All new information is compiled into a newly created block, which is then added to the chain once it is complete.
A database organises data into tables, but a blockchain organises data into chunks (blocks) that are linked together. As a result, while all blockchains are databases, not all databases are blockchains.
Distributed Ledger Technology (DLT). What is it?
A distributed ledger is a decentralised database that is spread across several computers or nodes.
DLT refers to the technological infrastructure and protocols that enable simultaneous access, validation, and record updating over a network spanning numerous organisations or places.
A Distributed Ledger Technology is just a database that exists in several locations. A DLT offers an advantage over a centralised database that is set up in a single location.
A DLT nurtures the idea of a decentralized network opposing the idea of the conventional “centralized” mechanism.
In fact, a DLT is the blockchain technology that was introduced by Bitcoin. The introduction of this technology revealed immense potential across businesses and sectors.
What is the difference between Blockchain & DLT?
A Blockchain is often mistaken for Distributed Ledger Technology. In fact, blockchain is just one type of distributed ledger.
- A blockchain is a sequence of blocks, while distributed ledgers don’t require such a chain and has no need in block data structuring
- There is no proof of work and no offer for distributed ledgers, despite the fact that blockchain requires it.
- The distributed ledger concept is similar to the blockchain algorithm. All blockchains, in reality, are distributed ledgers. But there’s a catch: not all distributed ledgers are blockchains.
- Both blockchain and a DLT have numerous advantages, including providing users complete control over all information and transactions while fostering maximum openness. The technologies are critical in increasing back-office efficiency and automation. They are both highly beneficial in financial transactions, increasing security, and are both future technologies.
Do you believe blockchain is a future technology? Please share your thoughts with us.
