Best beginner guide on distributed ledger technology - Articlesonblockchain

Distributed Ledger Technology (DLT) is a form of digital record-keeping that uses a network of computers to store and share data. It is a type of distributed database that is maintained by multiple parties in a decentralised way. DLT is the foundation of cryptocurrencies like Bitcoin and Ethereum, but it can also be used to track and store other types of data, such as financial records, medical records, and legal documents.

What is a distributed ledger? 

 

A distributed ledger is a type of digital database that is shared across a network of computers. It is designed to be secure and immutable, meaning that it cannot be changed or deleted. All participants in the network have access to the same data, which is updated and validated in real-time as new transactions occur.

 

What are the advantages of distributed ledgers? 

 

The advantages of distributed ledgers include increased transparency, enhanced security, faster transaction times, and reduced costs. Additionally, distributed ledgers are resistant to tampering, making them more reliable than traditional databases.

 

How does distributed ledger technology work? 

 

DLT works by using a network of computers to store and share data. Each computer in the network keeps a copy of the ledger, which is regularly updated and validated by all participants. This ensures that the data stored on the ledger is accurate and secure.

 

What are some applications of distributed ledger technology? 

 

Distributed ledger technology (DLT) has a wide range of potential applications, some examples include:

Cryptocurrencies: Blockchain, the most well-known type of DLT, is used to create digital currencies such as Bitcoin.

Supply Chain Management: DLT can be used to create a tamper-proof record of all the transactions that occur within a supply chain, making it possible to trace the origin of goods and ensure that they are not counterfeit.

Smart Contracts: DLT can be used to create "smart contracts" which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code.

Identity Management: DLT can be used to create a decentralized system for storing and verifying identity information, enabling individuals to have more control over their personal data.

Digital Voting: DLT can be used to create a secure, transparent, and auditable voting system that allows for remote voting and prevents voter fraud.

Financial Services: DLT can be used to increase the efficiency and reduce the cost of financial transactions by creating a shared database of financial assets and enabling real-time settlement of trades.

Gaming and Digital collectibles: DLT can be used to create unique digital assets that can be owned and traded by players, creating new revenue streams for game developers.

Real estate: DLT can be used to create a tamper-proof record of property ownership, making it easier to buy, sell, and transfer property.

These are just a few examples, but the possibilities for DLT are vast and new use cases are constantly being developed.

 

What are some of the challenges associated with distributed ledger technology? 

 

Distributed ledger technology (DLT) is a relatively new technology, and as such, it faces a number of challenges. Some of the main challenges include:

Scalability: As the number of users and transactions on a DLT network increases, the network can become slow and expensive to use. This is particularly an issue for blockchain, the most well-known type of DLT, which is currently facing scalability challenges.

Regulation: DLT is a decentralised technology, and it is not yet clear how it should be regulated. Some governments have taken a cautious approach and have banned or restricted the use of certain types of DLT, while others have embraced it.

Security: DLT is a secure technology, but it is not immune to hacking and other forms of cyberattacks. As the technology develops, it will be important to continue to improve the security of DLT networks to protect users' data and assets.

Interoperability: DLT networks are not currently able to easily communicate with each other, making it difficult for users to move assets and data between different networks. This can be a significant barrier to the widespread adoption of DLT.

Adoption: DLT is a complex technology, and it can be difficult for non-technical users to understand and use. To achieve mainstream adoption, it will be necessary to develop user-friendly interfaces and applications that make DLT accessible to a wider audience.

Energy consumption: Some of the public blockchain networks like Bitcoin and Ethereum are consuming huge amount of energy which is a significant environmental concern.

Privacy and Confidentiality: While the transparency and immutability of DLT is one of its key advantages, it also raises concerns about privacy and confidentiality. This is a significant issue for industries that deal with sensitive data, such as healthcare and finance.

Overall, DLT is a promising technology with many potential benefits, but it will require ongoing research and development to address these challenges and fully realize its potential.

 

Conclusion:

By understanding how distributed ledger technology works and its potential applications, you can begin to explore the possibilities of this revolutionary technology. Whether you’re a developer, investor, or just an enthusiast, DLT has the potential to revolutionise the way we exchange data, assets, and value.

Ultimate Introduction to Blockchain Technology - Articlesonblockchain

Blockchain technology is a revolutionary technology that has been gaining a lot of attention recently. It is a distributed ledger technology that allows for secure, transparent, and immutable transactions between two or more parties. It is a decentralised system that does not rely on a central authority for verifying transactions. It is an open source platform, meaning anyone with the necessary coding skills can access the code and interact with it.

What is a Blockchain?

Blockchain is a distributed ledger technology that can be used to record transactions between two or more parties. It is a form of a digital ledger that stores data in blocks that are chained together. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. This data is stored across multiple computers or nodes, making it difficult to tamper with or corrupt. The nodes must come to a consensus to validate each transaction, ensuring its accuracy and validity.

How Does Blockchain Work?

 

Blockchain is a decentralised system, meaning that there is no central authority responsible for verifying transactions. Instead, the nodes in the network verify the transactions by coming to a consensus. This consensus is achieved through a process known as “mining.” Blockchain miners use specialised hardware to solve complex mathematical problems in order to validate the transactions. Once the miners have validated the transaction, it is added to the blockchain and can never be changed or reversed.

Let’s take an example of two users A and user B who are trying to make a transaction. The steps would be as follows:

Step-1: A initiates a transaction by creating a digital signature using their private key.

Step-2: The transaction is broadcast to the network and picked up by the miner.

Step-3: The miner verifies the transaction using A's public key and the digital signature.

Step-4: The miner then groups the transaction with other unconfirmed transactions into a block.

Step-4.1: The miner then competes with other miners to solve a complex mathematical problem called a "proof of work."

Step-4.2: The first miner to solve the problem gets to add the block to the blockchain, and in return, gets a reward in the form of newly minted bitcoins.

Step-5: Once the block is added to the blockchain, the transaction between A and B is considered confirmed.

Step-6: B can now check the blockchain to confirm that they have received the bitcoins from A.

Step-7: B can now spend the bitcoins in another transaction by following similar steps.

What are the benefits of Blockchain?

Blockchain technology offers several benefits that can improve efficiency, transparency, security, network distribution, traceability, and reduce costs. Some of the key benefits include:

Efficiency: Blockchain allows for faster and more secure transactions, reducing the need for intermediaries and streamlining processes.

Transparency: Blockchain provides a tamper-proof record of all transactions, making it easy to track and verify information.

Security: Blockchain's decentralised and distributed architecture makes it resistant to hacking and fraud.

Network distribution: Blockchain allows for decentralised networks, which can improve accessibility and reduce the risk of a single point of failure.

Traceability: Blockchain technology enables traceability of all transactions in the network, increasing accountability and enabling real-time tracking of goods and assets.

Reduced costs: Blockchain can reduce the need for intermediaries and streamline processes, resulting in cost savings.

Availability: Blockchain networks can be accessible globally, 24/7 with no downtime.

Automation: Blockchain smart contracts can automate many processes, reducing the need for manual intervention.

Decentralisation: Blockchain allows for the distribution of power and control, making the network more resilient and less vulnerable to manipulation.

Tokenisation: Blockchain technology allows for the creation of digital assets, such as tokens, which can be used as a means of exchange, representation of assets, or access to a network.

What are the realtime applications of Blockchain?

Blockchain technology has a wide range of potential applications as shown in the below picture:

[source: miro.medium]

Cryptocurrency: Bitcoin, the first and most well-known application of blockchain, allows for peer-to-peer transactions without the need for a central authority.

Supply Chain Management: Blockchain can be used to track products as they move through the supply chain, increasing transparency and efficiency. An example is IBM Food Trust, which uses blockchain technology to track the movement of food products from farm to store.

Voting Systems: Blockchain technology can be used to create secure and transparent voting systems, as votes can be recorded and tallied on the blockchain.

Digital Identity: Blockchain technology can be used to create secure digital identities, which can be used for a variety of purposes, such as logging into websites or accessing government services.

Real estate: Blockchain technology can be used to record and transfer property ownership, making the process more efficient and secure.

Banking: Blockchain technology can be used to increase the speed and security of financial transactions and settlement.

Healthcare: Blockchain can be used to securely store and share patient data and electronic medical records, allowing for better coordination of care and improved patient outcomes.

Gaming: Blockchain technology is being used to create new types of games, such as collectible card games that use non-fungible tokens (NFTs) to represent in-game items.

These are just a few examples of the many potential uses of blockchain technology. 

Conclusion:

Blockchain technology is an innovative and disruptive technology that has the potential to revolutionise many industries. It is a secure, transparent, and immutable technology that can be used to facilitate secure and efficient transactions between two or more parties. As the technology continues to evolve, more use cases for blockchain will be discovered and the technology will become even more accessible and useful.

Ledger: Top Blockchain Smartcontract Platforms And Their Differences From One Another - Articles

Top 5 SmartContract Ledger Development Platforms:

The five most popular smartcontract platforms, Ethereum, Hyperledger Fabric, Corda, Stellar, and Rootstock, are discussed in this section. Ethereum, Hyperledger Fabric, and RSK have Turing-complete smartcontracts; however, Corda and Stellar have Turing-incomplete smartcontracts. Ethereum and RSK are public smartcontract platforms (i.e., permissionless), meaning anyone can join the network at any time.

8 Key Distinctions Between The Major Blockchain Ledger Platforms:

Corda has permissioned type of ledger, and supports smartcontract function, meaning you can write and deploy smartcontracts in Corda Blockchain. Corda is an open-source blockchain platform for developers to create permissioned distributed solutions. Tezos is an open-source blockchain platform used worldwide to build decentralized blockchain networks.

 

Hyperledger Hub is a project developed by The Linux Foundation to openly develop centralised and decentralized blockchain platforms. Hyperledger Sawtooth is another scalable blockchain platform in the Hyperledger Hub, designed to develop distributed ledger applications and networks. Enterprises are using Hyperledger Sawtooth to create systems that are both scalable and reliable, as well as deploy blockchain solutions that are highly secure.

 

This platform provides users with a safe, scalable platform for supporting their confidential contracts and private transactions. Hyperledger users can build secret channels to specific members of a network, which allows the transaction data to be seen by only selected participants. Hyperledger Fabric also supports the Open SmartContract Model, which can support a variety of data models, such as Accounts and Unspent Transaction Output, or UTXO, models (see the sidebar).

 

Unlike Ethereum, which uses Virtual Machines (VMs) to execute smartcontracts (i.e., EVMs), Hyperledger Fabric smartcontracts utilize Docker containers to execute the code. EVM is compatible with other blockchains like Solana and Avalanche, which allows developers to migrate their smartcontracts across platforms. With well-written rules, well-defined development guidelines, and Ethereums native coding language called Solidity, it has proven comparatively simple to deploy smartcontracts and Dapps to the platform.

 

Ethereum is also better than any other smartcontract platform when it comes to developer numbers (200,000), making its developer community one of the most vibrant and responsive. The Ethereum network envisions using blockchain technology to not only support a decentralized payments network, but to also store computer code that could be used to fuel decentralized, tamper-proof, financial contracts and applications.

 

Ethereum is yet another blockchain use-case which supports bitcoin (BTC) and in theory, it is not supposed to actually compete with bitcoin. BTC and ETH are both digital currencies, but Ethers primary goal (ETH) is not to establish itself as an alternative monetary system, but rather to facilitate and monetize operations on the Ethereum networks smartcontracts and decentralized applications (dapps) platform. Tezos In development since 2014, Tezos is a more mature platform supporting decentralized applications, smartcontracts, and newer financial instruments like NFTs, which can be thought of as a modern variant on trading cards tied to a digital asset.

 

Cited Sources:

https://www.itransition.com/blog/smart-contract-platforms 

https://geekflare.com/blockchain-platforms-for-finance-applications/ 

https://pixelplex.io/blog/smart-contract-platforms/ 

https://cointelegraph.com/blockchain-for-beginners/smart-contract-development-platforms 

https://www.investopedia.com/articles/investing/031416/bitcoin-vs-ethereum-driven-different-purposes.asp 

https://www.cronj.com/blog/smart-contracts-platforms/ 

https://www.techtarget.com/searchcio/feature/Top-9-blockchain-platforms-to-consider 

https://www.blockchain-council.org/blockchain/top-10-blockchain-platforms-you-need-to-know-about/ 

https://blog.logrocket.com/top-blockchain-development-frameworks/ 

 

Ledger: Can a Power Systems Rely on Blockchain Technology? - Articles

Source: https://www.cigre.org/article/GB/the-application-of-blockchain-technology-in-power-systems

Existing system challenges can be resolved by using the Blockchain digital ledger technology to assist multiple power applications at the generation, transmission, distribution, and consumption stages. Trading renewable energy certificates and credits based on actual energy usage can be automated using blockchain ledger technology.

Context:

Blockchain “Distributed Ledger Technology” (DLT) is capable of managing and storing transactions involving numerous parties. DLT can be used for any multi-step transaction-based application that demands security, traceability, and visibility because of its immutable, secure, and transparent nature. By removing the need for a middleman and connecting the buyer and seller directly, blockchain technology lowers the expenses and fees associated with transactions.

In the P2P network, blocks that are identically stored for each market participant are used to store any transactions. The owner's digital signature authorises each transaction in this digital ledger, ensuring its authenticity and protecting it from fraud. Based on who may add data to the chain and access the distributed ledger, there are three different types of blockchain platforms: Public, Private, and Consortium.

Can blockchain be implemented in power grids? - Articlesonblockchain

Using blockchain digital ledger has many advantages, few of them are secure, transparent, and robust network with a tamper-proof data record accessible to all participants in the network. With these features, the existing difficulties in the power system can be addressed in the production, transmission, distribution, and consumption phases.

How does blockchain help renewable energy? - Articlesonblockchain

• The actual transactions between the producer and consumer for consuming the renewable energy can be automated.

• Payments in the P2P microgrids can be created through Blockchain smartcontracts.

• For coordination of wholesale power trading, blockchain removes the necessity of middle man management like brokers, indexing agencies, specialised energy trading, or risk-management software.

• Interactive dashboards on customer utility, grid interactions, payment information, and energy consumption can be managed efficiently using the blockchain distributed ledger technology.

What Infrastructure used in blockchain technology for energy trading? -Articlesonblockchain

The critical components for implementing blockchain technology are full nodes (computers), partial nodes (smartphones or smart meters), a communication network, and a software platform.

Conclusion:

Blockchain digital ledger technology has the potential to drastically improve energy markets. However, because present implementations are on a small scale, extensive work is required before any wider implementation can be a serious disruptive force in this field.

Note: For case studies on Power Systems Rely on Blockchain Technology refer to below links:

[0] - https://www.cigre.org/article/GB/the-application-of-blockchain-technology-in-power-systems

[1] - https://www.ceew.in/cef/masterclass/explains/the-role-of-blockchain-technology-in-the-power-sector

Ledgers: Uses of Blockchain Smartcontracts - Article

Uses of Smart Contracts:

Blockchain Smartcontracts can be used in almost all fields, starting from healthcare to supply chain to financial services. Some examples are as follows:

Voting system:

Smartcontracts provide a secure environment making the voting system less susceptible to manipulation. Votes using smartcontracts would be digital ledger-protected, which is extremely difficult to decode.

Moreover, smartcontracts could increase the turnover of voters, which is historically low due to the inefficient system that requires voters to line up, show identity, and complete forms. Voting, when transferred online using smartcontracts, can increase the number of participants in a voting system.

Healthcare Industry:

Blockchain can store the encoded health records of patients with a private key. Only specific individuals would be granted access to the records for privacy concerns. Similarly, research can be conducted confidentially and securely using smartcontracts.

All hospital receipts of patients can be stored on the blockchain and automatically shared with insurance companies as proof of service. Moreover, the digital ledger technology can be used for different activities, such as managing supplies, supervising drugs, and regulation compliance.

Supply chain Industry:

Traditionally, supply chains suffer due to paper-based systems where forms pass through multiple channels to get approvals. The laborious process increases the risk of fraud and loss.

Blockchain can nullify such risks by delivering an accessible and secure digital version to parties involved in the chain. Smartcontracts can be used for inventory management and the automation of payments and tasks.

Financial services Industry:

Smartcontracts help in transforming traditional financial services in multiple ways. In the case of insurance claims, they perform error checking, routing, and transfer payments to the user if everything is found appropriate.

Smartcontracts incorporate critical tools for bookkeeping and eliminate the possibility of infiltration of accounting records. They also enable shareholders to take part in decision making in a transparent way. Also, they help in trade clearing, where the funds are transferred once the amounts of trade settlements are calculated.

Cited Source: https://corporatefinanceinstitute.com/resources/valuation/smart-contracts/

Ledger: Capabilities of Blockchain Smartcontract - Article

 

In general a contract is an enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. Similarly, in blockchain, we have a concept called Distributed Ledger Smartcontract which is a computer programs or protocol used to automate transactions that are stored on a blockchain and execute in response to meeting certain conditions. 

Below are few of the capabilities of Distributed Ledger Smartcontracts:

Accuracy: Smartcontracts are accurate to the limit a programmer has accurately coded them for execution.

Automation: Smartcontracts can automate the tasks/ processes that are done manually.

Speed: Smartcontracts employ computer code to automate procedures, reducing the time needed to complete all activities requiring human contact. Because everything is programmed, the time it takes for the code in the smart contract to run equals the time it takes to complete all of the tasks.

Backup: The shared ledger is maintained by each node on the blockchain, making this service the best possible.

Security: Cryptography can guarantee the assets' security. Even if the encryption is cracked, the hacker will still need to change every block that follows the one that was changed. Please be aware that a small or medium-sized business would be unable to complete this assignment due to its extreme difficulty and computational requirements.

Savings: Smartcontracts reduce costs since they do away with the need for middlemen. Additionally, little to no money is spent on the documentation.

Manages information: Smartcontracts hold information about an application, such as domain registration and membership records, and manage users' agreements.

Multi-signature accounts: Smartcontracts allow for the distribution of funds through multi-signature accounts as soon as all parties have signed off on the arrangement.

Ledger: Articles On Blockchain Smartcontract

Source: https://cdn.wallstreetmojo.com

The code and agreements contained within it live on distributed, decentralized blockchain networks. The terms of the contracts derive from blockchain users agreements to execute a program concurrently through a blockchain deployment system.

Once the contract is approved, it is deployed to the existing blockchain or another distributed ledger infrastructure. The prototype uses the Blockchain and smart contract technologies, and is designed to record the financial transactions within the terms of a building contract. There are different outcomes of this study resulting from developing the prototype of the contract management within financial activities using a cryptocurrency paradigm with the blockchain on various scenarios for the delivery of works at construction sites.

 

Smart contracts may also benefit from blockchain and other distributed ledger technologies for maintaining verifiable records of all activities related to executing complex processes, and which cannot be altered after the fact. The programs underlying smart contracts can be stored within the blockchain or other distributed ledger technologies, and integrated with a variety of payment mechanisms and digital exchanges, which may include Bitcoin and other cryptocurrencies. With blockchains, we can envision a world where contracts are embedded into digital code and stored on transparent, shared databases, where they are protected against removal, tampering, and modification by contracts themselves.

 

When embedded on blockchain, smart contracts allow for automatic enforcement of contractual terms in a deal, without an involving trusted third party. Just like a vending machine can automatically execute a contract for selling only physical goods contained in it, so too a smart contract built on blockchains can ensure the automatic execution of a contract that is related solely to transactions on blockchain-based assets (De Filippi & Mauro, 2017). Buterin (2013) proposed a decentralised platform for smart contracts on the basis of the blockchain in order to resolve any issues related to the execution context, and enable a global secure state.

 

In other jurisdictions worldwide, contracts are of varying legal status, and therefore, whether or not contracts written in code are legally binding depends on the countrys legal system. In other jurisdictions around the world, contracts have different status so whether a contract written in code is legally binding depends on the countrys legal system. Other legal challenges that could be mentioned are: (i) every country has their own laws and regulations, therefore, it is difficult to guarantee that it is compliant with all regulations, (ii) the terms of a law or conditions are not quantifiable, therefore, modeling those conditions into a smart contract is still difficult to make it relevant and quantifiable to the machines executing it, and (iii) governments are interested in the regulation and monitoring the usage of Blockchain technologies for a number of applications, which means the untrustworthy networks would fall back into a trust less third-party networks, which would therefore, therefore, losing some of their essence .

 

Other legal issues can be cited including:

(i) each country has its own laws and regulations, hence, it is complicated to ensure compliance will all regulations.

(ii) law clauses or conditions are not quantifiable, thus it is still complicated to model these conditions in smart contracts so that they are appropriate and quantifiable for a machine to execute them.

(iii) governments are interested in a regulated and controlled use of the blockchain technology in many applications, however, this means that the untrustworthy network will regress to a third-party trusted network, losing part of its essence [79 ].

Then, operationalisation is introduced to a cooperative web framework, showing steps for executing a smart contract, how actors interact with smart contracts, how operations are performed on a Blockchain network. The provision of smart contracts allows the greater blockchain value capture by setting up fixed transactions according to unique conditions (Angelis and Ribeiro da Silva 2019), a value feature for a network with multiple relationships and roles.

 

Cited Sources:

• https://www.tandfonline.com/doi/full/10.1080/00207543.2022.2039413 0
• https://research.stlouisfed.org/publications/review/2021/02/05/decentralized-finance-on-blockchain-and-smart-contract-based-financial-markets 1
• https://www.frontiersin.org/articles/10.3389/fbloc.2020.553671/full 2
• https://www.techtarget.com/searchcio/definition/smart-contract 3
• https://link.springer.com/article/10.1007/s12083-021-01127-0 4
• https://www.investopedia.com/terms/s/smart-contracts.asp 5
• https://www.sciencedirect.com/science/article/pii/S0167739X19316280 6
• https://policyreview.info/glossary/smart-contracts 7
• https://www.mdpi.com/2075-5309/12/8/1072 8
• https://hbr.org/2017/01/the-truth-about-blockchain 9