What Is A Distributed Ledger?
The ledgers, the basic unit of accounting, are as old as writing and money. The records in the paper were digitalized until the 80s when personal computers were introduced.
The first digital ledgers imitated the accounting of the paper-based world and were used as the logistics of paper documents rather than the creation of digitization.
Paper-based institutions (money, seals, written signatures, bills, certificates etc.) constitute the backbone of the society.
Along with the discovery and use of some new and interesting algorithms, cryptography has enabled the creation of distributed ledgers.
In its simplest form, the distributed ledger is a database that is maintained and updated independently by participants. The distribution is unique; records will not be transmitted to various nodes by a central authority, instead, it is held and created independently by each node. That is, each node on the network processes each action, reaches its own conclusions and then votes these conclusions to provide the majority of votes for these results.
As a result of these votes, when there is consensus, the distributed ledger is updated, and all nodes maintain their own copy of the ledger. This architecture, a recording system going beyond a simple database, allows for a new dexterity.
The formation of distributed ledgers symbolizes a revolution in how information is gathered and communicated. It is true of both static data (a registry), and dynamic data (transactions). Distributed ledgers lead users to go beyond simple custodianship of a database and to use, manipulate and extract value from databases — less about protecting a database, more about managing a system of record.
To understand better these systems arisen thanks to the blockchain technology, we recommend that you first read what is blockchain.