BLOCKCHAIN, CENTRALIZED LEDGER AND DISTRIBUTED LEDGER TECHNOLOGY

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BLOCKCHAIN

Blockchain just as its name implies refers to the data stored in blocks of information that are linked together in a permanent chain, itis the building block on which cryptocurrencies can function i.e. cryptocurrencies cannot exist without blockchain. The blockchain technology also have other technologies embedded in it such as:

Cryptography: which deals with encoding and decoding of data i.e. the ability to share data/information between two peers without the knowledge of any third party.

Blockchain eliminates intermediaries, lowers costs and improves efficiency by bringing transparency and security.

CENTRALIZED LEDGER

An example of centralized ledger is a bank which acts as an intermediary to conduct and execute transactions between two peers. Here the peers must trust that the third party will act in an unbiased way to maintain the ledger. Therefore, two parties who agreed on a transaction will rely on a third-party institution to carry out and document the transaction. Central ledgers, on the other hand, are no longer the only viable choice for transferring our assets. We may now obtain our paychecks without having to rely on a bank because of distributed ledger technologies.

DISTRIBUTED LEDGER TECHNOLOGY (DLT)

DLT stores information verified by cryptography and each user maintains a copy of the data. DLT like blockchain are peer-to-peer networks that enable multiple members to keep their own identical copy of the transaction carried out, Here there are no intermediaries.

It also allows members to securely verify, execute, and record their own transactions without relying on a middleman.

 

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  1. […] Blockchain technology has created a world where anything and everything is possible. […]