Distributed Ledger Technology (DLT) is the widely accepted term describing the intersection of computer science, mathematics, and cryptography in the digital space.
The combination of these three disciplines allows for trust and transfer of value across vast, borderless, and distributed, peer-to-peer, networks of computers; also known as nodes, which are spread across global locations.
Since centralization is counter to the design of such technology, vast node distribution is critical to the strength and trustworthiness of the network. In the image above, the distributed financial institutions are also representative of an individual’s personal device.
These nodes enable a synchronized distributed database to exist because each node replicates and stores an identical copy of a ledger.
A ledger is a permanent record of all settled economic transactions and accounts. Evidence of these physical financial journals have been found dating back to 2600 B.C.
The architectural design of DLT makes information stored within it immutable and permanent in the digital space – a first in human history. DLT varies in 2 forms, and currently, 2 structures. They are:
Form 1) Permissionless (Public)
Form 2) Permissioned (Private)
Structure 1) Blockchain
Structure 2) Directed Acyclic Graph (DAG)