Ledgers in the cryptocurrency industry are commonly decentralised, as they do not involve the governance of any central authority. They work as a tool to keep track of transactions, identities, and balances within a network, known as distributed ledger technology (DLT).
Distributed ledgers are organised, held, and managed by computers, also known as ‘nodes’. Organisations employ distributed ledgers to process transactions, facilitate data exchanges, and validate transaction authenticity. Typically, these transactions are added to the ledger only after all parties have achieved consensus. Once this is complete, the nodes update the database, and the changes are reflected on other nodes.
In a modern environment, blockchains have become a prominent and highly efficient distributed ledger due to their immutability and security. For example, the Bitcoin blockchain acts as a distributed ledger that stores all Bitcoin transactions using cryptographic proofs. Once the transaction data is added to the blockchain, it cannot be deleted or tampered with in any way.
