Bitcoin course for beginners 2 - 05/11
What is a distributed ledger?
Distributed Ledger Technology (DLT) is the other name for blockchain.
In a nutshell, it refers to an infrastructure with allows consensuses and protocols that offer validation and record updating in an immutable manner (but not always into blocks).
These sets of data are spread across a borderless, censorship resistant network which is decentralized.
It means that there is no third party that you must trust. The deep structure of the network (peer-to-peer) is a very good first security apparatus in the case of bitcoin.
Another important feature of distributed ledgers is that they store information in a secure, organized, and immutable fashion using cryptography. The ledger can be access using a pair of keys and cryptographic signatures. It makes them immune to hackers. In other words, a distributed ledger is an immutable database governed by consensus and protocols. These rules are embedded into the code but the nodes (the users), if they reach a “consensus”, can sometimes participate to the evolution of the whole system.
Critics say that only permissionless distributed networks are the real breakthrough. Indeed, the idea of DLT is not new but all the past versions (until bitcoin) were centralized; their data stored at different locations but connected to a central system.
These networks are also called “Fancy Excel sheets”.
What makes them so resilient to cybercrime is that they replicate copies of the blockchain and spread them across the network. To take it down, all the nodes should be attacked at the same time but the simultaneous peer-to-peer sharing and spying (Nodes are constantly spying, comparing each other) make the whole process very effective, safer, and cheaper than the centralized systems.
These technologies have a great potential, but they are still in their infancy. However, they are adopted by governments and corporations because they offer disintermediation and huge savings. DLT technology will be used for tax collection, decentralized identity, passport issuance, land registries, supply chains, art, music industry and finance.
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