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  • Mon, Jul 30, 2018 Concepts of distributed ledger technology and blockchain, stand with different interest groups

    blockchain_meme


    More and more people are beginning to explore the blockchain world, including traditional centralized organizations such as banks and governments, and are beginning to try to make this technology work for themselves. However, in this field, a word is used more and more frequently - distributed ledger technology / DLT (distributed ledger technology). And ironically, those who want to subvert the bitcoin and blockchain worlds—banks, governments, and large business groups—are the ones who use DLT the most.

    Recently, the Bank of England announced that it will use the blockchain and DLT technology to upgrade the clearing system. This expression means that the two words are not mutually replaceable, so in this case, we need to know the difference between the two. Distributed ledger technology/DLT, as its name implies, DLT refers to a way of data logging that does not need to be stored or confirmed by any centralized subject. Although it sounds like a blockchain, it is not. In the context of DLT, the executor has greater control over the specific implementation of data storage and validation. In principle, they can develop a network architecture and specific functions that serve a specific purpose. In this way, it seems that it is not decentralized at all.

    At the technical level, DLT has the characteristics of decentralization and relies on a consensus principle similar to blockchain. However, in the case that the centralized subject has control over a decentralized network, ideologically, that does not conform to the characteristics of the decentralized organization. DLT can be seen as a preliminary action to form a blockchain, but it is important that it does not have to build a chain that links the blocks. All it needs to do is to store the books in a distributed manner on many different servers and let them communicate with each other to ensure accurate and timely recording of transactions.

    Companies that prefer to use DLT rather than blockchain technology include Google, which recently partnered with Digital Asset to bring DLT tools to its cloud service customers. Blockchain, the blockchain is actually a distributed ledger built by a special underlying technology. As we know, the blockchain can be based on a decentralized network, creating a non-tamperable ledger, and all records are recognized by consensus mechanisms. The cryptographic signature and the recording of the link chain are features that separate the blockchain from the DLT. Of course, depending on the purpose of the particular blockchain, in some cases the public or the user still has the opportunity to change the way the network is organized and operated. Bitcoin is the purest example of blockchain and decentralization. It is not only decentralized at the technical and structural levels, but its management organization and development are also decentralized. In DLT, only technology is decentralized, and the main body of operations is not.

    Organizations like the Bank of England are more inclined to use DLT to distinguish themselves from the uncertainty and fanaticism associated with blockchain. Of course, for the same reason, some organizations tend to use blockchains to attract more people's attention, although usually they don't create real blockchains.