Skip to content

Distributed Ledger: Demonstrated

distributed ledger
Distributed ledger explained. Generally, a ledger is a means of record keeping for a company or financial institution to keep a track of its financial history.

Generally, a ledger is a means of record keeping for a company or financial institution to keep a track of its financial history. They were the foundations of accounting and have been maintained since time immemorial on several mediums ranging from stone to paper to eventually computers. On similar terms, a distributed ledger is a database which is accessible to every member of that particular network. This means that there are public witnesses to each and every transaction or exchange that pulls through on that system thus making it virtually impossible for a fraud to take place or for someone to override the network and cause a cyberattack. Spread over several sites and geographies, this distributed ledger is shared and synchronized with the consensus of every member over the network.

A new future for transactions

Instant payments are made on one single consensual shared ledger which cannot be meddled with. Each and every transaction is immutable, which means that its record on the blockchain can never be changed by any third party, irrevocable, which means that any transaction or exchange once initiated cannot be reversed or canceled, and incorruptible, which means that there are no loopholes for fraudulent activities like scam and double spending to take place.

No central authority in the form of a government body or a centralized financial institution like banks is required to keep a check against fraud or to act as a trusted middle party. Transactions can be completed independently by two willing parties by developing trust on secure and tamper proof cryptographic tools and methods.

To attack a distributed ledger, you would need to attack all the copies of the information distributed over the entire network which practically spreads across the entire world. This would require a lot of effort and power to override the system and actually commit and malicious attack.

Distributed ledger: Its scope is revolutionary

Distributed ledger technology shows massive and appealing prospects in the future. Once adopted on a worldwide scale, it can completely change the way not just the internet works, but also companies, banks, and even governments. Tax collection, contract maintenance, passport issuance, recording registries, issuing licenses and even voting would completely change. Even the diamond and precious and semi precious assets industry has been revolutionized to an extent with the steady and gradual adoption of this technology. The technology in itself is in a very nascent stage so there would be huge increase in its utility once its further developed and deployed for commercial use.

Consensus

Since record keeping and settlements are not required to be monitored by a trusted middle party thus making it a central authority, this distributed ledger system is highly unique. Records are constructed independently by each node in the network and held onto. Every node in the distributed network processes the transaction. After coming to a conclusion of its own, these conclusions are voted upon in order for a majority of them to be agreed upon.

The entire distributed ledger on the network is updated once this general consensus is achieved. Since every node in the network maintains a copy of this distributed ledger, this technology is far from just a simple database.

Distributed ledger: Faster, better, cheaper

The accelerated speed at which developments are taking place in the field of distributed ledger technology would soon bring about a change in the way the world operates. There would be faster, newer ways to transact and make contracts, with improved efficiency, no human blunders regarding incorrect data entries. Embezzlement of funds would be practically impossible. Users would soon own their own data. No third party would have storage or possession of someone’s personal credentials. This would highly secure and protect one’s cyber identity and make one immune to scams.

What next?

To bring a technology like distributed ledger into the mainstream global financial and economic tracks, one needs to do their part to let more and more people discover and explore this new breakthrough. Start talking to your banks regarding how they are incorporating the distributed ledger in their payment and transaction systems. Educate yourself and explore the various ways your bank is updating its technologies and how they plan to incorporate those updations with the distributed ledger. Map out the current pressure points of having to pull a successful payment transaction at the current speed and how they could be further advanced for higher consumer satisfaction and more frequent and reliable merchant-customer relations.

Latest