The popularity of Bitcoin and Ethereum puts a spotlight on the existence of blockchain technology. Many try to explore their potential and add new features that could potentially revolutionize the way people live. However, blockchain is not the only one of its kind. There are four others like it and all of them fall under the name Distributed Ledger Technology (DLT).
Features of a DLT
DLT is not a new concept but it’s not widely known, either. It is a technology that can improve the quality of life but applications still have to be innovated for mainstream use. The most-known example that has improved through DLT is payment. It is also used in other industries such as healthcare, law, and enterprises because of the following features:
One of the best features of DLT is that it can be automatic and independent. There is no need to hire agents or workers to handle the validation, verification, and confirmation of actions. It makes the process cheaper and time efficient.
It also allows easier means for adoption as network developers offer more solutions. Nowadays, cryptocurrency in a blockchain can be deposited in various accounts online for trade, payment, or playing slot games.
This is what gave the technology its name. A ledger is a record of everything that happens within the system. It includes content, current owner, history of past owners, and actions. These data are not owned by a single entity but shared in different servers. Therefore, it makes it difficult to shut down. It will continue to run for as long as servers that share the ledger are active.
The feature that makes DLTs popular is their security. Each asset in the network is protected by encryption. It is a type of security that uses cyphers or codes that cannot be edited. It cannot be read by humans nor can it be decoded by a computer.
Only the person authorized to see and edit it can do so. This authority is provided with a private key which is also encrypted. There has never been a breach on any DLT since they debuted.
4. Users Are Anonymous or Confidential
DLTs safeguard the anonymity or confidentiality of their users. There is no need for a valid ID to make an account. Simply create an account and protect your wallet. The only times that a user’s identity is revealed is when they chose to do so. This is often an important decision that companies have to make to allow investors to monitor their expenses.
Another important feature of DLTs that stemmed from being distributed is that it needs all or most of its users to agree that an action is valid. A centralized network could be biased or corrupt so the decentralized system of DLTs offers to change that. Actions and records can now be processed by algorithms that act on checklists made by other users. The action will not commence if it violates at least one of those lists.
Actions made in a DLT cannot be reverted. It can be undone by sending the data back or erasing changes made to a document. However, those are already recorded in the data’s history.
Every action made in the network is time-stamped. Meaning, it has a record of the specific information that dictates when it happened. This feature is not for humans but for the algorithm. This helps the network prioritize which data to check for validation and verification.
DLTs are highly valued for the aforementioned features. They are automatic, secure, and cheap alternatives to many traditional means. Many DLTs are being used in many industries, not just finance. It also offers a safer means for users to transfer assets such as making deposits to play slot games or paying for an online service.
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