Blockchain and Distributed Ledger technology
Many of us have been using these two terms interchangeably, believing that they are same. But this is not the truth. Of course, they both are related and share some similarities. For example, DLT and blockchain are decentralized and digitalized logbooks that record information and distribute it throughout the network. Despite this, they have a set of distinguishing features that set them apart from each other.
If you’re planning to invest in DLT mobile app development, then you need to know the differences in both. However, before we dive into the specific features of DLT and blockchain, let’s learn a little bit about these technologies.
What is DLT?
DLT or Distributed Ledger is a digitalized system that records the transactions of assets while storing data at multiple places. Unlike a traditional database, DLT doesn’t have a centralized place to store information and data, which eliminates the need for an intermediary for validating processes and transactions. Thus, it offers a great degree of transparency and openness to each user.
What is blockchain?
When it comes to blockchain, it is a decentralized and public database where transactions or entries must be confirmed. In this technology, the data is stored in blocks, and the hashcode of each block is dependent on the previous block’s data. Features like scalability, immutability, and transparency make blockchain the most preferred technology by businesses and developers.
The primary differences between Distributed Ledger and Blockchain
To begin with, you should always keep in mind that blockchain is a type of distributed ledger.
- Block structure
One of the chief differences between blockchain and DLT relies on their block structure. Blockchain involves a chain of blocks that store data, whereas Distributed Ledger need not be in the form of a chain.
- Consensus mechanism
Another factor to keep in mind when comparing blockchain and DLT is the consensus model. In the latter case, the participation by the nodes is limited, which does not apply to the blockchain. In this case, anyone can participate and add a new block to the already existing chain.
- Sequence of blocks
When you look at the sequence of blocks in the blockchain space, they are in the form of a chain, of course, it is in a serial mode. But blocks can be arranged in any shape or form in Distributed Ledger Technology.
As compared to the blockchain, DLT offers the highest level of efficiency because it can carry out a large number of transactions within a minute and at a much-reduced cost. For this reason, several cryptocurrency development companies are planning to invest in Distributed Technology.
Security is another factor that distinguishes Blockchain from Distributed Ledger Technology. In the case of blockchain, the users need to have a key to access their stored data, which means, on losing the key, they can’t access their accounts and funds. On the other hand, you cannot face such situations because the data stored in DLT is encrypted and distributed across multiple networks.
Depending on the above discussion, we can say that every blockchain is distributed ledger, but all DLT is not a blockchain.
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