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Blockchain and DLT

How Is Distributed ledger Technology Different From Blockchain?

What is Distributed Ledger Technology, and how is it different from Blockchain?

Blockchain is becoming more and more accepted as a concept in the world of finance nowadays. The idea of blockchain has been explored by a greater audience every day, with even traditional centralized financial institutions are taking an interest in what blockchain can offer.
However, most of the traditional financial institutions have started to use another term alongside blockchain: the distributed ledger technology. Articles, as well as corporate statements, seem to use terms “blockchain” and “distributed ledger technology” interchangeably. This article will try to explain that there is a difference between the two terms as well as what the difference is exactly.

Distributed ledger technology
Distributed ledger technology, or DLT, as some people may call it, is a database of records that aren’t stored or confirmed by a central body. This database is then spread across several nodes. Each node saves an identical copy of the ledger, therefor making it decentralized. Each participant node of the network works independently from one another.

 

The distributed ledger technology ensures that each node updates independently. The nodes vote on each update to ensure that the majority of the nodes agree with the conclusion reached. This voting process is called consensus. Distributed ledger technology dramatically reduces the cost of trust.
With that being said, distributed ledger technology may sound just like blockchain, but it is not.

Distributed ledger technology offers the implementer to have more control over how it is, in fact, implemented. While distributed ledger technology is technologically decentralized and relies on similar consensus guidelines as blockchain, it offers its owner to dictate its structure, purpose, and function.
This technology can be considered the first step towards a blockchain, but they won’t necessarily make a chain of blocks. A distributed ledger can be stored across many servers, which then communicate to ensure the most accurate and up to date record of transactions is maintained, without the need to create blocks.
Blockchain
Blockchain is, in fact, a form of distributed ledger technology. However, blockchain has very specific technological features.

Blockchain ensures cryptographic signing and linking groups of records of transactions in the ledger.

This way, blockchain forms a chain, which is where it got the name from. Depending on the specifics of a certain blockchain, the public is given the opportunity to give their opinions on how it is structured and where it is headed.
Bitcoin can be considered a true example of a blockchain user. It shows how a blockchain should run. Bitcoin is completely open, and anyone can contribute to its code and give their opinion on how to improve it. Meanwhile, distributed ledger technology only has part of it decentralized. The governing portion of the ledger is completely centralized.
Distributed ledger technology and blockchain are not interchangeable
Even though every blockchain is a form of a distributed ledger, not every distributed ledger can be considered blockchain. The two terms cannot be used interchangeably as they represent similar, but not the same things.

With that said, some organizations, corporations, and institutions may prefer distributed ledger technology over blockchain. The Bank of England is considering distancing themselves from the volatility associated with blockchain by supporting distributed ledger technology. Many corporations also might prefer the idea of a decentralized ledger so they could keep matters in their hands while using the word blockchain to capitalize on the public’s interest.

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Crypto Market Analysis

Blockchain or Cryptocurrency?

Blockchain and Cryptocurrency

Technology advancements have brought us many amazing things. One of them is Blockchain along with Cryptocurrencies. However, there is quite a big debate in this field. It’s regarding the importance of Cryptocurrencies in the world, while no one disputes the importance of Blockchain. One side of the debate says that Cryptocurrencies ARE Blockchain and that the two can’t be separated, while the other hand says that Blockchain is a great invention, while Cryptocurrencies are not here to stay. Before analysing the subject, we have to know what the definitions of both Blockchain and Cryptocurrencies are.

Blockchain vs Crypto

A Blockchain is merely a chain of blocks, while Cryptocurrencies are currencies built on Blockchain that serve a particular purpose they are made for. When Bitcoin was the only Blockchain, no one tried to separate or differentiate the two. However, once more Cryptocurrencies started to emerge, people saw the distinction. But, can one work without the other?

Blockchain vs Crypto

Cryptocurrencies work on the Blockchain, which serves as a distributed ledger. That way, it forms a network. Cryptocurrencies are nothing more than tokens that value the utility that the protocol presents. That way, Blockchain and Cryptocurrency work hand in hand, and should not be thought about as separate entities.

A distorted view of Blockchain

You can hear “Blockchain is revolutionary, but Cryptocurrencies are meh” from many people nowadays. However, that is an extremely distorted way of looking at things. The reason for that is the actual devaluation of Cryptocurrencies as the “driver” of the blockchain “vehicle”. There are tokenless Blockchains, but they are far from perfect. On the other hand, Cryptocurrencies have the potential to reach their true purpose of fully decentralising an operation, valuing it at the same time, and doing it healthily and without any artificial aid.

Cryptocurrency vs Blockchain

Future of Blockchain without crypto

Many companies are trying to approach the Blockchain integration without actually considering Cryptocurrencies. Anything can, of course, happen, but Blockchain without Cryptocurrencies most likely won’t. The symbiosis between the two is too great and too valuable to pass on.

Cryptocurrencies are here to stay, and so is Blockchain. The actual Cryptocurrencies we have today might not survive, but the concept will.