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What is DLT?
DLT stands for Distributed Ledger Technology, also referred to as a shared ledger or distributed ledger. It is a digital system that records transactions related to assets across multiple locations simultaneously.
Unlike traditional databases, DLT has no central storage, enhancing security, transparency, and trust among users. This decentralization stems from peer-to-peer (P2P) networks, where nodes communicate directly without intermediaries. Consensus algorithms ensure synchronization and integrity.
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Key Features of DLT
- Decentralization: No single point of control or failure.
- Transparency: All participants can verify transactions.
- Immutability: Once recorded, data cannot be altered retroactively.
- Security: Cryptographic techniques protect against tampering.
Blockchain as a DLT Subset
Blockchain is the most prominent DLT implementation. It structures data into blocks linked chronologically via hashes, creating an irreversible chain.
Advantages Over Traditional Systems
- Trustless Environment: Parties interact without pre-established trust.
- Reduced Costs: Eliminates intermediaries (e.g., banks, notaries).
- Faster Settlements: Cross-border transactions completed in minutes.
FAQ
1. Is DLT the same as blockchain?
No. Blockchain is a type of DLT, but not all DLTs use blockchains (e.g., Directed Acyclic Graphs).
2. What industries benefit from DLT?
- Finance: Secure payments (DeFi).
- Supply Chain: Real-time tracking.
- Healthcare: Patient data management.
3. How does DLT achieve consensus?
Methods like Proof of Work (PoW) or Proof of Stake (PoS) validate transactions democratically.
"DLT redefines how we exchange value and information."
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Core Keywords
- Distributed Ledger Technology
- Decentralization
- Blockchain
- Consensus Algorithms
- Peer-to-Peer Networks
- Smart Contracts
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