In our effort to learn blockchain to its full length, we need to understand the underlying concepts. One such crucial concept is Distributed ledger technology (DLT). Blockchain and DLT work on the same concept. And that is why Blockchain is said to be a type of distributed ledger technology used for specific purposes. In this tutorial, we will set our focus on the details of the distributed ledger technology and understand it better. This in terms will help us understand the concept and working of blockchain better.
What is Distributed ledger technology (DLT)?
The Distributed ledger technology distributes a copy of the same version of digital ledger to each node in a point to point network. That is, a record or digital ledger is shared between all the participants of a network. This eliminates the need for a centralized authority having control over the ledger.
It is a technology that provides a framework for a lot of related technologies like Blockchain. As we know, a decentralized peer to peer network is like a large web that has a lot of points of connection. Similarly, the distributed ledger technology operates on a decentralized network that has a lot of nodes irrespective of their location. Thus, such a network can expand over the entire globe.
In such a network, each node has its own private copy of the ledger and is free to carry out transactions with any node in the network directly. They do not need to mediate a transaction or request access to the ledger through a centralized authority. Every time the ledger is updated, every node gets to refresh it. Such a system also helps in establishing trust between the nodes in a network. It is by the means of mathematical procedures and algorithms like hashing, cryptography, and digital signatures.
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