Surely you are already more than familiar with Bitcoin and technology
Blockchain as a result of all the noise generated earlier this year.
However, you may not know the “twin” brother of the Blockchain,
DLT (Distributed Ledger Technology). Both technical concepts have
things in common for being digital and decentralized record books.
In this post we tell you what DLTs are and how they differ from
blockchain.
What are DLTs and what is their meaning?
Distributed Ledger Technology (DLT) or general ledger technologies
distributed are a set of technologies that allow us to design a
system structure that allows it to function as a database NO
centralized. This means that there is no central computer or server
that stores the information making it a more secure system
(the database cannot be hacked as there is no central computer
to attack).
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One of the most representative forms of this DLT technology or
Distributed ledger technologies are payment systems.
In the following image we can compare a centralized system with
a decentralized system.
Now, not all DLT systems have to have a decentralization
complete. There are different degrees of decentralization that we are going to see
now. We can find a complete decentralization (without a core of
control), distributed (one or several control cores, together with several nodes
of support), or federated (where the local nuclei have great autonomy).
Access to these systems can be public or private, depending on
clear to the level of security that you want to apply to the system.
Differences between DLT and Blockchain
If you are wondering what differences exist between a DLT system and a
blockchain system is completely legitimate. We can say that the
DLT technologies are the largest category of Blockchain. This means that
ALL blockchain networks are DLT technologies but not all DLTs are
blockchain technology.
To give you an example we could say that DLT is the category and Blockchain
it’s football». As you can see, football is within the sports category, but
Not all sports have to be football.
In the previous image we see how within DLT technologies there are
other technologies such as Tempo or Dag, in addition to Blockchain.
For its part, Blockchain or Blockchain technology is a
system whose operation depends on generating blocks where it is stored
information. These blocks then link with each other generating
the well-known chain of blocks. This chain ends up generating a record
linked and non-modifiable of the information that has been stored in said
blocks.
Both DLT networks and blockchain networks use protocols of the type
P2P or peer-to-peer which guarantees that security standards and
immutability are very high. And as in the DLT there are different
degrees of decentralization (complete, distributed or federated), in networks
blockchain exactly the same thing happens.
In short, a DLT network enables the secure operation of a database
decentralized digital data and where distributed networks eliminate the
need for a central authority to control manipulation.
However, they are not all similarities. Unlike Blockchain,
DLT does not necessarily need to have a blocky data structure.
A DLT is simply a type of database distributed over multiple
sites, regions or participants.
How DLTs work
DLT allows the storage of all information safely and
accurate using cryptography. It can be accessed via
«keys» and cryptographic signatures. Once the information is stored,
becomes an immutable database and is governed by the rules of the
net.
Distributed Ledger Technology is not entirely new, many
organizations and companies keep their databases «separate» in
different locations. This guarantees them a minimum degree of
decentralization, however, each location is typically
in a central connected system that makes them vulnerable to attacks
cyber and local issues.
The very nature of a DLT makes them immune to cybercrime, as
that all copies stored on the network must be attacked at the same
time for the attack to succeed.
In addition, the simultaneous (peer-to-peer) sharing and updating of
records makes the entire process much faster, more efficient, and more
economic.
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Potential and future of DLTs
DLTs have great potential to revolutionize the way we
governments, institutions and corporations work. Can
help governments with the collection of taxes, the issuance of
passports, property and licenses, and disbursement of benefits
of Social Security, as well as voting procedures.
This technology is changing the way many industries work
such as finance, music and entertainment, the arts, supply chains
of various basic products and more.
In addition to startups, many large companies such as IBM and Microsoft
are experimenting with Blockchain technology.
Some of the most popular distributed ledger protocols are
Ethereum, Hyperledger Fabric, R3 Corda and Quorum.
The benefits of Blockchain and DLT technology
The potential applications of both technologies is simply immense.
You may think that they are simply databases but the truth is
innovative of these is that it allows us to have a greater degree of transparency,
efficiency and automation.
Some of the applications that have the DLT per field
Financial systems
You have probably heard the applications of technologies
decentralized, blockchain and cryptocurrencies such as Bitcoin.
And it is that the financial systems were one of the first cases of
use of this type of technology and have made it possible to build a new system
secure and accessible payment system for the world.
Cybersecurity
Although it seems that finance is the field with the greatest application of these
technologies is actually cybersecurity. Remember that one of the
interesting features of these technologies is the potential that
have to build secure networks with different degrees of
decentralization
Supply chain and logistics
One of the sectors in which decentralized technologies can
cause greater disruption is in logistics and supply chain.
Especially in those logistics processes in which there is a high
number of intermediaries. With this technology we can generate and create
systems that adjust to the complex realities of the processes
logistics.
One of the best examples is the TradeLens system, a system designed
by Maersk in collaboration with IBM that allow to optimize processes in
marine logistics and international trade.
Health
Finally, one of the most relevant areas pending disruption is
the health system. An area with great development potential for
decentralized technologies.
One of the challenges is to be able to develop a distributed system where
Hospitals are able to store information securely and
that are quite accessible.
With such a system, for example, the data could only be
read or modified by the hospital in question. Something only possible if
use your access credentials or private keys. Of the rest, nobody could
access or affect such systems. In case something happens, it would be enough
with reboot the systems resynchronize and start working again.
In addition to this, the level of auditing and access to medical data of the
patients is granular. That is, systems can be created that only give
access to very specific pieces of information if desired.
Decentralized technologies are already changing the world
that surrounds us and are generating a new industry that will demand
highly qualified professionals with excellent expectations
employment and international projection. If you work or want to dedicate yourself to
this industry we recommend that you keep up to date with
of the best professionals in our Master in Blockchain and Fintech
Master in Blockchain and Fintech
Learn the basics of these new payment and financing methods to
Apply them in any business.
Blockchain and its relationship with cryptocurrencies, the new paradigm
