A distributed ledger is a type of data structure which resides across multiple computer devices, generally spread across locations or regions.
Distributed Ledger Technology includes blockchain technologies and smart contracts. While distributed ledgers existed prior to Bitcoin, the Bitcoin blockchain marks the convergence of a host of technologies, including timestamping of transactions, Peer-to-Peer (P2P) networks, cryptography, and shared computational power, along with a new consensus algorithm.
DLT: distributed ledger technology generally consists of three basic components:
- A data model that captures the current state of the ledger
- A language of transactions that changes the ledger state
- A protocol used to build consensus among participants around which transactions will be accepted, and in what order, by the ledger.
According to hyperledger.org:
“A blockchain is a peer-to-peer distributed ledger forged by consensus, combined with a system for “smart contracts” and other assistive technologies.”
Smart contracts are simply computer programs that execute predefined actions when certain conditions within the system are met.
Consensus refers to a system of ensuring that parties agree to a certain state of the system as the true state.
What are some examples of other blockchain and distributed ledger technology systems, and what are their benefits?
Chain Core, created by chain.com, has initially been designed for financial service institutions,
and for things like securities, bonds, and currencies.
Their company has strong ties with Visa, Citigroup, and Nasdaq.
The Corda distributed ledger platform is designed to record, manage, and automate legal agreements between businesses.
It was created by the R3 company, which is a consortium of over a hundred global financial institutions.
Quorum is a permissioned implementation of Ethereum, which supports data privacy.
Quorum achieves this data privacy through allowing data visibility on need-to-know basis by a voting-based consensus algorithm.
Interestingly, Quorum was created and open sourced by JPMorgan.