Distributed Ledger Technology is a buzz word these days. It is so much talked about, debated upon, and is one of the highly in-demand things in today’s time. But what does it exactly means? Why is it gaining so much importance? Where can it be used? In this article, we will address such questions and explore the concept properly. So, without wasting any moment, let us start.
Understanding Digital Ledger Technology-
In the most basic manner, a Distributed Ledger can be seen as a database, a database which is shared after getting the due consensus of the participants. This database is then made available across various places such as websites, geo-locations, institutions, and so on. The Distributed Ledger Technology is based on Blockchain Technology. There are good advantages of this transparent-open nature of the Distributed Ledger Technology-
- Given it involves mass consensus; therefore any changes, any action, or any transactions are done right in front of the eyes of the public. This open environment offers transparency and keeps online threats and attacks under control. After all, thieves prefer night time to steal as the ambiguity of darkness allows thieves to protect their identities. This analogy helps in understanding how the open and transparent nature of the Distributed Ledger Technology helps in keeps the malicious minds away.
- Another benefit of the open structure of the Distributed Ledger Technology is the participants of each node of the ledger are in full command of the recordings that are shared on the network. Further, if they wish they can also have a true copy of the same.
- Any movement or any editing or omitting in the database on the ledger is revealed to all the participants alike. The process is very quick, which keeps the participants updated all the time.
What makes Distributed Ledger Technology so special?
We hope that the above section gave you a good basis to understand the structure of the Distributed Ledger Technology. Now, the question comes that what makes it so in demand? What characterizes it as so special? Let us have a look at its unique features-
- Decentralized Nature- First of all, it is a decentralized technology. Meaning that there is no centralized authority that governs it. This, further results in a lot of benefits, such as power in the hands of the user.
- Freedom of Access- The decentralized nature of this technology renders it to be free from geographical bondage. Meaning, it can be accessed from anywhere and by anyone on the planet.
- Cryptography- The Distributed Ledger Technology uses cryptography. Cryptographic leys and signatures offer high levels of security, transparency, and accuracy, as everything is time-stamped. This further reduces the possibilities of manipulations to a great extent.
- Robust- The Distributed Ledger Technology with the help of the ledger system of storing the database and securing it with cryptography renders thee data as immutable. It becomes super difficult for hackers to permeate. The decentralized nature of the technology makes it a very secure platform, in comparison to the centralized ledger system which is prone to online attacks.
- Less Manipulation- Given the database is under mutual and open consensus between the participants; the scope of manipulating of the data by a single participant is difficult.
- Record-Keeping- Ledger has been a part of world economics since its commencement. From papyrus to paper to computers, the journey of record-keeping has been fantastic. Now, with the innovation of the distributed ledger technology, the journey has just taken another flight. The transparency, the time-stamped nature, accuracy simply makes it all the more robust and effective.
Real-world uses of DLT-
Who wouldn’t like the transparency of system, accuracy, and efficiency in their business or field of work? These qualities are sought out in every field. Therefore, the DLT technology can be used in-
- Voting and its calculations. The DLT system can eliminate the possibilities of manipulation.
- It can revolutionize the financial services by supporting governments, banks, and other institutions.
- Maintaining and managing energy records, such as electricity, gas, water, etc.
- Law and order can benefit from it in big ways by using its transparent and accurate nature.
- Insurance industry too can benefit from DLT with its stunning record-keeping ability.
- Other industries that can make use of DLT include- the music industry, healthcare, public record-keeping, supply chain management, real estate, cloud computing, retail industry, charity work, art industry, issuance of passports licenses, maintain records for land registries,
The need for embracing the DLT-
DLT is new and is in its nascent stage. The unknown aura around anything has always repelled humanity since ever. So is the case with DLT. There is a need to embrace technology to reap its benefits and explore it fully. The mass adopting can be done with the help of spreading awareness about it, through educating people about it, and of course by participating in it. T.S Eliot puts it the best- ‘Only those who can risk going too far can find out how far can they go.’