What is Distributed Ledger

Beginner

3m March 17, 2023

Distributed Ledger is a decentralized database to keep and share records managed by multiple participants across the network. The integrity and consistency of the stored data are ensured by consensus mechanisms and cryptographic tools. Blockchain is one type of Distributed Ledger.

What is blockchain? What's its unique structure? Please refer to the content: What is Blockchain

Main features of Distributed Ledger

Decentralization

Different from Centralized Ledger, the ledger is managed by a set of participants (nodes) rather than a centralized administrator. Each participant is required to record data that happened within the network independently. And they will continuously synchronize the records through set rules (consensus) to maintain consistency.

What is a node? What's its utility? Please refer to the content: What is Node / Validator

Security

Compared to Centralized Ledger, Distributed Ledger has less potential to suffer cyber-attacks. Because the record is not stored in a single location / system, and every participant has a completed and synchronized transaction record, the malfunction or damage of one or a few participants cannot influence the whole network.

Transparency

The records are transparent. All the participants can access and construct the ledger so that everyone can check the record. It is hard to alter or manipulate transaction information on distributed ledgers unless controlling the majority of nodes within the network.

A 51% attack is an attack that maliciously controls most of the discourse in the ledger. For more information, please refer to the content: What is 51% Attack

Categories of Distributed Ledger

Based on who can read or access the ledger, Distributed Ledger can be categorized as Public or Private. Public means everyone can read the ledger, while private distributed ledger can only be accessed by approved participants.

Based on who can validate the ledger, Distributed Ledger can be divided into Permissioned or Permissionless. Permissioned means only a specific group of trusted users can validate or modify entries to the ledger, while Permissionless indicates that anyone is allowed to build and verify the ledger.