The Blockchain technology: DLT
Why it’s fundamental to fully understand the underlying Blockchain technology and how it works.
Last few years, due to pandemic spreading that compelled the majority of people to turn into a more digital-related way to make the most of everyday life activities, there’s a particular and revolutionary kind of innovation that started to emerge very rapidly: Blockchain.
Although it was a more or less known topic before the pandemic, It’s been with it that the world has begun to assists at its powerful features.
In a nutshell, the main goal of Blockchain technology is the opportunity allowing to make ample types of transactions through a network of hosts, also called nodes.
Another referred Blockchain name is a ledger that directly reprises the technology it uses to make all these operations possible. Let’s discover together what Digital Ledger Technology (DLT) is.
History hour
Ledgers have been used since ancient times. Their concept was to be a tracker for all the economic transactions inside a particular place. Whether it was a simple good purchase or a greater assets investment, such as building constructions or getting stocks dividends, were always stored internally to ledgers.
Furthermore, the entire array of these operations wasn’t just tracked inside a ledger, but it was also kept under control by the government and authorities. As a result, It was possible to know where your funds were spent and also to trace both the sender and recipient.
A workaround: DLT Introduction
For the reasons above, people who usually made purchases of this type started to look for an alternative that enabled them not only to make all the investments they wanted without an authority who could trace them but also that treated both their data and privacy in a safe way.
To overcome this issue, Distributed Ledgers came into play.
What exactly is a DLT?
A DLT is a compound of tech infrastructures and protocols whose purpose is to provide a helpful way to record data, share information and projects against data tampering. Moreover, a Distributed Ledger allows simultaneous access, validation, and record updating in an immutable manner across a network that’s spread across multiple entities or locations.
Some of its main goals
There are numbers of goals a ledger has been designed to attain, such as:
- Data security: Needless to say, one of the main objectives, maybe the most important, is the possibility to make transactions without the fear of possible data theft.
- Increasing information speed: Ledgers designers didn’t want just to make security a priority but reach a high-speed transmission from point to point as well.
How does DLT operate?
Their uses come through a Peer-to-peer network (P2P). As mentioned above, ledgers operate through a node's network. Simply explained, when we refer to a device's network we usually talk about a place where there is a master computer, called a server, that’s the unique entity that is capable to deliver nodes multiple services.
However, the model adopted by Blockchain is fairly unlike. Whether in the prior scenario we assumed there’s just a single device that offers services, a P2P Network doesn't do so.
Along with it, the possibility of a single device to be both server and client comes. In this way, a generic computer is able to either provide several services or receive ones.
Which kind of algorithms are involved?
From a technical sight, Ledgers are built upon Consensus Algorithm, that cover Proof of work, Proof of stake, Voting systems and Hashgraphs.
The first twos are the most widely used and known when it comes to Blockchain. In a few words:
- Proof of work: Used by Bitcoin and formerly adopted by Ethereum, it requires all the involved nodes inside the network to solve a complex mathematical problem called mining, in order to check the safety of the transaction inside it. Despite the fact it’s a well-established algorithm for its security level, on the flip side it’s required to spend more energy by solving math problems.
- Proof of stake: Starting to being used by Ethereum, the new Blockchain block creator is being chosen by multiple users who put at stake a definite amount of crypto. Consequently, there are no complex problems to solve and therefore there’s also a less energy amount spending. For this important brand new feature, Ethereum 2.0 is going to use it, also not to make users pay for gas fees.
To sum up
Currently, like any Web3 application, Distributed Ledger Technology are still in their prime and it’s curious to discover which of its upcoming applications are going to be.
However, this is just one of the hottest future tech topics that are planning to take the world by storm.
But, for now…
That’s all folks.
