What is a Distributed Ledger on The Blockchain?
Put simply, a distributed ledger is literally a list of every transaction made within the network of a particular cryptocurrency, each one compiled into blocks before the blocks are permanently logged onto the ledger. A copy of the ledger is held by every single miner, who’s computing power works to authenticate and log every transaction, hence the term distributed ledger. The ledger is permanent and as soon as one transaction is made, it cannot be reversed or changed.
With fiat currency, the banks manage the ledger as they’re the trusted third party so that both the sender and beneficiary of a transaction do not need to agree on the transaction as the bank does this for them. The blockchain removes the need for this third party as everyone holds a copy of the blockchain.
This ledger is updated by miners, they verify all of the previous transactions hence why there is time delay when sending or receiving a transaction.
The idea behind the blockchain is that it is completely removes the need for a trusted third party and by everyone holding a copy of the transactions we can all agree on who owns what in the network.
In other words, a ledger is a permanent summary of all transactions that have taken place, which cannot be changed. Traditionally with the ledger banks use, transactions are open to the possibility of being edited fraudulently, and are more prone to possible mistakes.
Throughout the ages, for as long as humans have used any form of currency, some kind of ledger was used to keep track of who owned what. Clay tablets, ancient scrolls and even wooden artefacts have been found all around the world which record the store of currency.
More recently in human history, we used a paper ledger, but as the internet and technology began to take over in the 80’s and 90’s, all of these records we created in digital form, a huge task for those doing the uploading, but the savings on time & resources were back then phenomenal.
Now though, the blockchain enables the list of transactions to be completely automated, even more securely and trustworthy than any method previously known. Human intervention is not needed, just computing power alone.
There is no one central location, no centralised control, just a gigantic network, sharing the same ledger, distributed simultaneously between them all.
The blockchain is a fully automated money monitoring machine which cannot be stopped, and it all started with the distributed ledger introduced via Bitcoin.
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