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.

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: Features of Blockchain Smartcontract - Article

 

Distributed Ledger Smartcontracts:

These are very simple programs with conditions in it, stored on blockchain to run till the condition is met. This digital program used to automate the execution of an agreement between the parties allowing them to perform successful transactions without any involvement of central authority / agency. 

While I was checking through the Internet on the Features of Smartcontract, I have come across below list of points and they are unique in a way based on my understanding when compared with smartcontracts controlled central governing authority / agency.

Below are the few of the Features of Ledger Smartcontracts:

Immutable: Once deployed smart contract cannot be changed, it can only be removed as long as the functionality is implemented previously.

Distributed: Everyone on the network is guaranteed to have a copy of all the conditions of the smart contract and they cannot be changed by one of the parties. A smart contract is replicated and distributed by all the nodes connected to the network.

Transparent: Smart contracts are always stored on a public distributed ledger called blockchain due to which the code is visible to everyone, whether or not they are participants in the smart contract.

Secure: Smart contracts can only perform functions for which they are designed only when the required conditions are met. The final outcome will not vary, no matter who executes the smart contract.

Some of the other Characteristics of ledger smartcontract:

Autonomy: There is no third party involved. The contract is made by you and shared between the parties. No intermediaries are involved which minimizes bullying and grants full authority to the dealing parties. Also, the smart contract is maintained and executed by all the nodes on the network, thus removing all the controlling power from any one party’s hand.

Customizable: Smart contracts have the ability for modification or we can say customization before being launched to do what the user wants it to do. 

Trustless: These are not required by third parties to verify the integrity of the process or to check whether the required conditions are met.

Self-verifying: These are self-verifying due to automated possibilities.

Self-enforcing: These are self-enforcing when the conditions and rules are met at all stages.

These features alone are not making Smartcontracts unique in the blockchain technology, Features along with Capabilities are main backbone for the distributed smartcontracts. I have posted an article on Capabilities for more information - "Ledger: Capabilities of Blockchain Smartcontract - Article " 

Source: 

[0] https://www.geeksforgeeks.org/smart-contracts-in-blockchain/