Are blockchain and distributed ledger technology the same?
We are living in a digital age of sound bites and buzzwords. An age where even complex technological solutions are reduced to five words or less. As a result, we are witnessing a rise in cunning businesses attempting to piggyback the so-called crypto boom. Some are even doing this by rebranding with ‘blockchain’ in their name.
Predictably, using buzzwords such as blockchain technology to attract investment will only deliver short-term gains. Ironically such actions are responsible for the branding issues of this tech. Leading to one of the reasons why many are wary of blockchain. Meanwhile, emerging trends suggest that distributed ledger is providing value and tangible results without the hype.
Blockchain has hit the headlines on an almost daily basis alongside the rise of Bitcoin and other cryptocurrencies. However, distributed ledgers have not received the same level of focus. Words such as distributed ledger technology and blockchain in the same sentence often leave people with more questions than answers. This is before you even bring Bitcoin into the mix to further muddy the waters.
People often think of blockchain technology and distributed ledger technology as the same. It’s easy to see why many would think along those lines. Now it is time to scratch beneath the surface and see the truth behind the buzzwords. Although these terms have become entwined over the past few years, it is essential to distinguish the two from one another.
What Is A Distributed Ledger?
Despite confusing acronyms such as DLT in financial and Fintech circles, the good news is that this technology is relatively easy to understand. A distributed ledger is a database that exists across several locations or among multiple participants. By contrast, most companies currently use a centralized database that lives in a fixed location. A centralized database essentially has a single point of failure.
