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October 19, 2020

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All You Need to Know about Distributed Ledger

History of ledgers is as ancient as the mankind is. Clay, stone, paper, wooden sticks and payrus were initially used for ledgers until it became digital in 1980s and ‘90s when computers took over the paper records. Usually manual data entry is required for ledgers.

Paper Records vs. Distributed Ledger

Although digital ledgers only copied the catalogues and accounting of paper records, it was considered a creative work rather it is regarded as paper documents logistics. Still today, paper records are present in the form of bills, certificates. Signatures, seals, money and bookkeeping entries, and these records are still considered the backbone of our society.

However, with the advanced developments in cryptography and improved algorithms, computing power has revolutionized the world of ledgers and has led to the creation of distributed ledgers.

Distributed ledger represents a certain database stored (regularly updated) created by each participant in a big network. These distribution ledgers do not communicate through nodes to transfer records as they are created independently by each node. Each node has the right to make its conclusions and then voting is conducted to get the majority decision. It is equally applicable to dynamic and static data types. All participants have the authority to access recordings in the network and save the changes or edited version for their own records. This process takes place in minutes. Each node or participant access the distributed ledgers using cryptographical keys and signatures.

After the consensus is reached among the nodes/participants, a given distributed ledger updates itself and all the participants/nodes are required to create a copy of the updated ledger. This whole process eventually brings a new record dexterity system where it is beyond the scope of simple database. This invention changed how data information is gathered and transferred to another entity.

Advantages of Using Distributed Ledger

Although paper-based ledgers have their importance in our society, yet the distributed ledgers are providing dynamic media form which has the capability to perform more than the paper-based ledgers have ever achieved. They update and secure relationships in the online world. For example, they are responsible for maintaining relationship among governments, regulatory compliance officers, banks, lawyers, and notaries.

In addition to this, distributed ledgers are famous for eliminating operational inefficiencies present in the network and make it faster for a transaction to be completed in an autonomous manner. This eventually reduce the overall cost for the companies in terms of their operational costs.

Thanks to the technological and computing revolution, we can store information on computers on higher forms, which are perfectly secure, fast, and written in a decentralized network. Distributed ledger is safer than that of centralized as it can survive cyber-attacks and digital frauds, and that is why, most companies prefer to use it. In addition to this, a distributed ledger always maintains resistance against manipulation in the networ

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