Blockchain fundamentals: distributed ledger or blockchain?
Every blockchain is a distributed ledger, but not every distributed ledger is a blockchain
We often refer to distributed ledgers and blockchains as the same thing, but they are substantially different.
Common features
Both distributed ledgers and blockchains are kind of technologies in which a database is spread across several nodes.
Both the DL and the BC require:
- Decentralisation
- Consensus among nodes.
Decentralisation means that the nodes are different computing devices. Each node replicates and save an identical copy of the ledger, and updates itself independently. There is no central authority.
Consensus means that the nodes vote on these updates to ensure that the majority agrees with the conclusion reached: if consensus is reached, the ledger updates itself. The autonomy of each node is subject to the achievement of a consensus on the operations carried out.
Differences
The main difference between a generic distributed ledger and a blockchain is that, on a blockchain, data are grouped together and organised in blocks. The blocks are then linked to one another and secured using cryptography.
Furthermore, a blockchain is a constantly growing succession of records: its structure allows data to be added to the database, while altering or deleting data already entered on preceding blocks is absolutely impossible.
A distributed ledger, instead, does not necessarily need to have data structured in blocks.
To be more specific, Distributed Ledger Technologies:
· do not require a chain
· could offer better scaling options.
In a nutshell
So, blockchain is one form of distributed ledger technology. But not every kind of distributed ledger employs a chain of blocks to provide distributed consensus.
What about the future scenario?
As the technology matures and entrepreneurs become more aware of their options, we could see less reliance on traditional blockchain systems and assist to a shift to other forms of DLT that satisfy the markets ever-changing demands.
