DLT, also known as a “shared ledger” or simply distributed ledger, is a digital system that enables users and systems to record data relationed to tangible and intangible assets.
DLT consists out of following key features:
- Immutable - Once data is written, it cannot be altered. If there are faulty records, the correction is an additional data entry. Hence this system is tamper proof as everything is recorded.
- Distributed - Data is stored in a distributed format where nodes have full or partial copies
- Shared - The data is shared amongst peers in a decentralized manner, no central authority owns it
- Append only - The data on the ledger is added in append only style
There are 3 different types of DLT
- Permissioned - Users need permission to access data, network and functionalities
- Permissionless - Users do not need permission to join network and can freely use network features and functionalities
- Hybrid - Combination of permissioned and permissionless
DLT ecosystem consists out of
- Hardware - The hardware is the basis of the DLT functionality
- Software - Software is dependent on the applications the DLT is used for
- Business - The stakeholders that contribute to the DLT
- Protocol - This is needed in order to guarantee the proper functioning of DLT
It is also known as trustless or public blockchains, are available to everyone to participate in the blockchains process that use to validate transactions and data. These are used in the network where high transparency is required.
- Permissionless blockchain has no central authority.
- The platform is completely open-source.
- Full transparency of the transaction.
- Heavy use of tokens.