CHAPTER 2

Understanding Distributed Ledger

Technology and Blockchain

Introduction

The distributed ledger technology allows for transactions and data to be

recorded, shared, and synchronized across a distributed network of different

network participants. It is a novel and fast-evolving approach to recording

and sharing data across multiple data stores.

Blockchains use cryptographic and algorithmic methods to record and

synchronize data across a network of different network participants in an

immutable manner. It is a data structure used in distributed ledgers storing

and transmitting data in packages called “blocks” that are connected to each

other in a digital chain.

A form of distributed and immutable ledger which is used in various types

of transactions with digital assets like transferring ownership, recording

transactions, tracking assets, and ensuring transparency, security, trust, and

value exchanges is blockchain.

Distributed ledgers such as blockchain are important as they are useful for

financial transactions, cutting down on operational inefficiencies that

ultimately save money. Also, due to their decentralized nature, security is

provided, and the ledgers are immutable.

Blockchain, essentially a DLT, uses cryptography techniques and

distributed consensus algorithms to create the features of decentralization,

traceability, immutability, and currency properties.

The 21st century’s security, privacy, trust, and equality can be realized by

implementing blockchain technology.

By the end of the chapter, you will have gained knowledge of the problems

that can be solved by blockchains with a thorough understanding of

blockchain technology and its applications in solving business problems, as