It has the ability to store, record, and exchange “information” in

digital form across different, self-interested counterparties without the

need for a central record keeper and without the need for trust among

counterparties.

It ensures that there is no “double-spend”; the same asset or token

cannot be sent to multiple parties.

A cryptographic solution is provided by DLT for providing security and

protecting system integrity in a decentralized ledger maintained by a

network of anonymous participants without any need for trust across one or

more institutions is a critical innovation in the context of digital currencies.

A blockchain is produced when a new digital currency transaction is

recorded and transmitted to a network in a data block, first validated by

network members and then linked to an existing chain of blocks in an

append-only manner, for example.

The earlier blocks cannot retrospectively be altered by any network member

when new blocks are added and as the linear chain grows.

Figure 2.1 shows the centralized ledger and the distributed ledger.

Figure 2.1: Centralized ledger vs. distributed ledger

Not all distributed ledgers necessarily use blockchain technology, and

conversely, blockchain technology can be used in different contexts.

The key to distributed ledger technology is its distributed nature, consensus,

and cryptographic mechanisms.