Distributed ledger

Distributed ledgers introduce a revolutionary new capability: non-trusting entities can securely share and trust a database outside their firewalls, without any intermediary or central authority.

A distributed ledger (also called a shared ledger, or referred to as Distributed Ledger Technology) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. There is no central administrator or centralised data storage - wikipedia

Distributed ledgers introduce a revolutionary new capability: non-trusting entities can securely share and trust a database outside their firewalls, without any intermediary or central authority.

The “nodes” of any distributed ledger are gatekeepers of its data; they follow strict protocols to reach consensus about which submitted data gets in, and which does not.

Distributed ledgers are immutable, irrefutable, and highly hack-resistant. Since each “node” of a distributed ledger has an identical copy of the ledger, not a single comma can be changed anywhere without being noticed, invalidated, and rejected by the network.

Though cryptocurrencies (there are hundreds now) like Bitcoin would not be possible without distributed ledger technology, the reverse is not true for permissioned ledgers, which can elegantly provide self-sovereign identity with no need for a cryptocurrency.

A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken.

One form of distributed ledger design is the blockchain system, which can be either public or private. But not all distributed ledgers have to necessarily employ a chain of blocks to successfully provide secure and valid achievement of distributed consensus: a Blockchain is only one type of data structure considered to be a distributed ledger.

Another form of distributed ledger design is the Tangle Network, which uses a Directed acyclic graph based network instead of the blockchain structure. The Tangle, created by IOTA, removes the need for miners, and proposes a network that supports zero-fee transactions and infinite scalability.

In 2016, numerous banks tested distributed ledgers for international payments.