Blockchain Blog Terms

What is a Distributed Ledger Technology?


The term ‘distributed ledger’ has been thrown around too many times around blockchain conversations. Many people consider blockchain technology and distributed ledger as one and the same thing. This is technically not true although the two are related. So, what is a distributed ledger? The answer lies in this article.

I will begin our journey into distributed ledgers by looking at what a ledger is. A ledger is simply a record of related data. It has existed for as long as the societies became complex and required a bookkeeping system to keep track of important economic activities.

Ledgers existed on paper until computers became accessible in the 1980s and 1990s. There was a transition from paper ledger to digital ones. The majority of the new digital ledgers were simply digitized versions of what previously existed on paper.

Since the beginning of time, a single authority has been responsible for validating the authenticity of transactions recorded on the ledgers. However, strides in technology, particularly cryptography, better computing power, advanced algorithms, and more have made it easy for ledgers to function smoothly without relying on central authorities such as banks.

Welcome to distributed ledgers.

What is a distributed ledger?

A distributed ledger is a database kept, updated, and verified by a number of independent computers (nodes) within a large network. Distributed ledgers have distributed witnesses which makes cyberattacks very difficult.

In a centralized ledger, only one entity holds the copy of the ledger. In a distributed ledger, all the nodes of the network hold the same copy of the ledger. No single entity can make changes to the ledger without the consent of the participating nodes.

Any new changes or changes are added to all the nodes in a matter of seconds.

Explaining distributed ledgers

A distributed ledger is best described as a ledger maintained in a decentralized form across a number of geolocations and eliminates the need for third parties such as banks or clearinghouses to maintain the truthfulness of the data it holds.

All the information is securely stored using cryptography and can only be unlocked by the use of keys and cryptographic signatures.

The information entered on the ledger is immutable and cannot be tampered with. Unlike centralized ledgers that have several weak target points, distributed ledgers are harder to hack because all the nodes on the network need to be attacked at the same time. This property makes the records on the ledger resistant to change by single entities.

Why business ledgers are important

The internet has brought the world together and reduced it to a global village. Nowadays, economic activities and transactions cut through geographic boundaries. Business networks allow entities to exchange value between assets. The assets can be anything from cars to deeds, stock certificates, etc.

Some of the ledgers currently in use are problematic. They are prone to inefficiency, high-cost, tampering, and abuse. They lack transparency and can be easily corrupted which leads to disputes. Solving the disputes and reversing the transactions is a costly exercise.

Businesses have lost a significant amount of money due to bad decisions made based on faulty and incorrect data. In best case scenarios, good decisions are delayed as businesses are forced to reconcile different copies of the ledgers.

Different types of distributed ledgers

This is where the confusion lies. It is worth remembering that blockchain is a subset of distributed ledgers.


A blockchain is a distributed ledger but a distributed ledger is not always a blockchain. They are many other types of distributed ledgers and blockchain only happens to be one of them.

A blockchain is an immutable ledger that records transactions on a peer-to-peer (P2P) network. The ledger is distributed across all the network members. A blockchain does not rely on a third party but uses a consensus algorithm to validate transactions.


Hashgraph is a type of distributed ledger technology developed in 2016 by Leemon Baird, the chief technology officer and co-founder of Swirlds.  It is considered by many to be superior to the blockchain. Hashgraph is built on the same concepts and refers to blocks as rounds. In all fairness, Hashgraph can be seen as a faster and more secure blockchain.

Hashgraph is regarded to be more efficient than blockchain. In a blockchain, transactions are grouped into blocks and if two miners create more than one block at the same time, one of the blocks is discarded while the other is used. This results in wasted efforts. Hashgraph betters this by making sure that “no blocks” are discarded.

Hashgraph is blockchain without limitations.


DAG stands for Directed Acyclic Graph. DAG is a term mainly used in mathematics and computer science. It is very technical but it can simply be regarded as a distributed ledger that carries all the benefits of blockchain topped off with better performance.


Holochain provides developers with a framework for building decentralized applications. It aims to be infinitely scalable, something that cannot be said about blockchains.

Blockchain use cases

Blockchain’s first and successful application is cryptocurrency. The technology is used to underpin cryptoassets such as bitcoin and Ethereum. However, blockchain has proven to be more than just that. It is slowly finding use cases in several other industries.

Here are some of the industries exploring or implementing the new technology:

  • Banking
  • Healthcare
  • Supply chain management
  • Transportation
  • Land rights property management
  • Remittance

Access to distributed ledgers

One question that comes to mind is who gains access to distributed ledgers. The answer depends on the nature and purpose of the distributed ledger or blockchain.

Let’s take the Bitcoin blockchain as an example. The network is open to all the members of the public and whoever wants to take part in maintaining the network. People can join and leave the protocol at will without affecting the network. There is no authority or board that sits down and decides who should or should not join the network.

There are also what are known as enterprises blockchain. These are created for a specific group of people or companies who share the same interests. For example, a permissioned banking blockchain is only open to banking and financial institutions.

Advantages and benefits of a distributed ledger

One of the major benefits of distributed ledgers is distribution and decentralization. The disadvantage of central ledgers is that they have one source of failure. If the servers are down, the whole network goes down too and brings a lot of inconvenience to users.

A distributed ledger will continue to function as normal even if one or more nodes on the network are down. Being centralized makes traditional ledgers easy targets of cybercriminals. There are several cases where hackers have targeted servers of companies and made off with user data. The recent Facebook-Cambridge Analytica scandal comes to mind.

This is different from decentralized ledgers. The hackers will need to infiltrate more than 50 percent of the network in order to steal data or tamper with it. This is almost impossible in theory.

Decentralized ledgers do not rely on third parties to authenticate transactions. This saves users time and money.

Distributed ledgers give users access and network participants access and control of their own data and transactions.

The future of distributed ledger

The future of distributed ledger will mainly hinge on its practical applications in finance and banking. The World Bank believes that distributed ledger technology has the potential to change the financial sector and make it more reliable, efficient, and resilient. The same can be said about the technology in other sectors as well.

The distributed ledger is still a nascent technology and perfect solutions are still far from being found. The technology can only grow as a result of research and conducting practical pilot projects.

Distributed ledger technology, especially blockchain, has the potential to play a significant role in uplifting emerging markets. Blockchain technology can be used to cater to the unbanked or underbanked in places like Africa.

Most importantly, institutions that have been centralized from the onset are starting to embrace distributed ledger technology. Banks and social media platforms have assembled strong teams to explore distributed ledgers.

Beginners Guide To Crypto
Subscribe to get your beginners guide and our weekly digest
We respect your privacy.

You may also like

Blog Press Release

Bitmain to reveal world’s first Big Data Analysis Report of Global Mining Farms during World Digital Mining Summit this October


SINGAPORE, 11 September 2019 – Bitmain – the world’s top 10 fabless chipmaker – is set to release the world’s first Big Data Analysis Report of Global Mining Farms during the World Digital Mining Summit (WDMS) on 8-10 October in Frankfurt.

The report will provide in-depth analysis and insights on the cryptocurrency mining industry – covering mining farms, to global electricity costs, site selection of mining farms and construction expenses – to help decision-makers have a more complete and comprehensive understanding of the market opportunities, risks and hurdles.

“Bitmain is proud to be leading research and development efforts in the cryptocurrency mining industry and this comprehensive big data analysis report is a successful outcome of it, thanks to our strength and experience accumulated in this industry,” said Matthew Wang, Director of Mining Farm of Bitmain.

The agenda for the two-day summit features industry investment and innovation for the mining sector….

View More Article
Blockchain Blog Interviews Investing

The Biggest Investing Opportunities In Blockchain | Aly Madhavji Partner BlockchainFF


ChainTalk Podcast 7

Aly Madhavji is Managing Partner at Blockchain Founders Fund. In this chat we discuss his slightly sketchy first experience with crypto, tokens vs equity investing, biggest opportunities right now to invest in, obstacles faced by blockchain companies, working with the United Nations and how blockchain is helping charities and the unbanked, the present and future of blockchain, Asia vs USA in adopting crypto, and the latest news in Asia surrounding crypto including the US China trade wars and recent currency scandal.

Aly Madhavji 穆亚霖 is the Managing Partner at Blockchain Founders Fund which invests in and venture builds top-tier Start-ups and consults companies and governmental organizations on emerging technologies. He is a Senior Investment Advisor to BitBlock Capital and Fiat Capital Fund, and a Co-Founder of a digital currency exchange. He has served on various blockchain advisory roles including Polymath and traditional advisory boards including the University of…

View More Article
Blog Events Press Release



8月6日夜、2019広州天英彙国際革新創業大会東京湾地区の開会式が東京表参道Portal Pointイノベーション空間で行われた。これらは天英彙が初めて日本で設定した競技場だ。広州市天河区政府の関係者たちと日本学習院大学の遠藤薫さんらが本開会式に出席した。



次に、会場からのカウントダウンの声の中、陳加猛、遠藤薫、天英彙海外地区主催側代表者、IBM日本代表者、アリババ クラウド日本代表者と日本人工知能イノベーション企業Autify代表者が共同で天英彙東京湾の横断幕を掲げ、天英彙試合会が日本に正式に始まることを示した。


続いて行われた「広東·香港·マカオ大湾区と東京湾区イノベーション円卓フォーラム」では、 Brincグローバル投資インキュベーター中国市場とチャンネルの責任者の曽君蔚とIBM日本デジタルコンサルティング専門家の吉本久、TMI総合法律事務所の小川周哉と日本人工知能イノベーション企業Autifyの最高経営責任者の近沢良は、イノベーション企業がいかに効率的に新しい市場に参入できるかについて議論を深めた。


今年度は、天英彙海外競技エリアはサンフランシスコ湾、ニューヨーク湾、トロント、シドニー、東京湾、シンガポール、テルアビブ、ベルリン、パリという9大国際イノベーション都市にそれぞれ競技場を置き、少なくとも600以上のグローバルイノベーションプロジェクトを募集する予定だ。今日まで、広州天英彙国際イノベーション創業大会海外競技エリアはすでに八大国外イノベーション都市地区で盛大に開会式を行い、 その中で、米国オークランド市長のシュエリビ、世界最大のインスタントメッセージングソフトウェアWhatsAPP共同創立エンジニアのEugene Fooksman、パリ19区副区長のJoyce Malai、シンガポール国立大学企業センターの副主任の陳正見、欧州華創会会長の黄進などの革新生態分野の重要なのゲストは各競技区の開会式に出席し、天英彙の競技参加者たちに祝福の言葉を贈った。それと同時に、天英彙は国際イノベーション生態の発展を積極的に推進していて、アメリカのオークランド市長のシュエリビと広州市天河区政府の関連責任者を証人として、天英彙競技海外地区主催側Brincグローバル投資インキュベーターはオークランド華埠商会、サンフランシスコ湾委員会とそれぞれ契約を締結し、同天英彙国際イノベーション連盟が第一歩を踏み出したことを示し、今後は更に多くのグローバルイノベーション都市との契約提携を推進し、国際イノベーション生態の発展を進める。

View More Article
Blockchain Blog Interviews Investing

Changing Banking With Blockchain – Tomohiro Yamaguchi Executive Director SBI


ChainTalk Podcast 6

Tomohiro Yamaguchi is Executive Director at SBI Fintech Solutions. In this chat we discuss his background and role at SBI, SBI’s commitment to blockchain technology, their investment into Ripple, cross border transactions within banks and the affect on international business, Libra and bank tokens, blockchain in the Middle East, and opportunities for investors.

Yamaguchi-san is an 18-year experienced pioneer in finance business and payment/international money transfer industry, in charge of new projects, management and development in Japan and overseas Fintech business. In addition, he is representative of global investment, international money transferring, blockchain space. He was in charge of overseas business development (including fund and financing services) for the SBI group. He leads a team of 17 business development directors.

Visit SBI:

Check out last weeks episode on Ripple:

If you enjoyed this episode and want to support our podcast please share it with your colleagues and friends….

View More Article
Blockchain Blog Cryptocurrency Exchange Mining News

Gone Missing: India Misses the Point on Crypto Regulation, Justin Sun Skips Lunch with Warren Buffett


India is taking a step backward in innovation as it proposes to a blanket ban on cryptocurrencies and severe punishment for those caught on the wrong side of the law. Justin Sun’s delayed his charity lunch with bitcoin critic Warren Buffett due to kidney stones. A bank in the Philippines has launched its own cryptocurrency. Cryptocurrency exchanges need to beef up their security strategies as new reports suggest that they lost $1.2 billion in theft and fraud in Q1 alone. 

Indian panel proposes cryptocurrency ban and jail time for offenders

India’s hostile position on cryptocurrency does not seem to be taking a turn for the better. A high-level panel created by three institutions – Ministry of Electronics and Information Technology, the Securities and Exchange Board of India, and the Reserve Bank of India – has recommended the banning of private cryptocurrencies issued in foreign lands…

View More Article