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. In fact, 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. Also, it is 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 is 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 don’t belong to a single entity but share 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. Solid encryption protects each asset in the network. It is a type of security that uses cyphers or codes that cannot be edited. Neither humans can read it nor computers can decode it.
Only the person authorized to see and edit it can do so. This authority comes 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 time 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 can be biased or corrupt. On the other hand, decentralized systems of DLTs offer to change that. Algorithms now process actions and records. They also 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.
Time-stamping happens for all actions on the network. 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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