Distributed ledger technology is an electronic database system distributed across multiple network nodes. This system is distinguished as it has no single regulatory body. DLT allows you to save the information and store it on a net that is both decentralized and distributed since all its participants interact inside the system. Such networks can be private or public.
How Does DLT Work?
Networks based on DLT do not have a single control center. Instead, information is stored across multiple peer-to-peer network nodes at once. An automatic consensus algorithm is used to update the data.
Data is transmitted over the network nodes, duplicated on them, and synchronized. This way each node updates itself to a complete copy of the registry. All nodes vote to update the registry after that and reach a consensus on one of its copies. Each such update is protected by a unique cryptographic signature. All this determines the security of the database and at the same time its transparency.
Are DLT and Blockchain the Same Thing?
These two terms are often used interchangeably, but in reality, the blockchain is just one type of distributed ledger. Its key feature is the organization of all data into a common blockchain with cryptographic protection. It is important that in such sequential chains, you can only add new data blocks, but you cannot correct or delete data already written. In addition, blockchains, unlike other types of DLT, are usually open public networks and do not require special permission to access.
All this makes the blockchain the optimal cryptographically secure network for recording, storing data, and freely tracking the history of transactions.
Where Сan DLT Be Useful?
- Finance. Today the main area of DLT application is financial. Cryptocurrencies operate on the basis of decentralized distributed ledger technologies, increasing the security and transparency of financial transactions. DLT is also used by large banking systems.
- Voting. DLT technology provides a transparent, yet confidential and secure voting system that solves the problem of fraudulent elections.
- Healthcare. Anywhere access to patient history and improved diagnostic tools is provided by distributed ledger technology.
- Supply chains. DLT improves the efficiency and transparency of global supply chains and provides consumers with up-to-date information on product quality and safety.
- Distributed ledger technology is used in many other areas where reliability, confidentiality, and transparency of information are needed, for example, in agriculture, mining of minerals, and others.
Electronic voting Through DLT
Blockchain in the legal field helps to exclude falsification of voting results. In systems based on distributed ledger technology, the voting results of each participant cannot be changed. DLT enables voting from anywhere in the world, for example, when a citizen is unable to arrive in his country at the time of the election. Also, this technology provides faster and more accurate vote counting. Here is the contact information for you to set your own oppinion.
While the DLT voting method is often used as a pilot project, many governments are already planning to launch such voting as a permanent practice.
DLT in Healthcare
In the medical field, the distributed ledger has also found useful application. DLT helps to exclude the loss, falsification, and transfer of medical data to third parties, to provide the necessary data about the patient to GPs from anywhere in the world, as well as to synchronize information. Thanks to this, with the permission of the patient each physician will quickly have access to the analyzes and diagnoses in case of a request for a remote medical consultation.
In addition, DLT allows to automation of the working processes of a medical institution on insured events and other controversial situations based on the patient’s state.
PokitDok is one of the successful examples of the implementation of distributed ledger technology in medicine. It resolved issues of identity management, benefits, and claims.
DLT and Turnover of Gems
The concept of introducing distributed ledger technology into the gem market was first presented during the Kimberley Process session in Dubai in 2016. The extraction of precious stones, their sale, and purchase in about three-quarters of cases is associated with fraud since diamonds are easy to hide or smuggle.
Antwerp World Diamond Center, De Beers, and AWDC have entered into an agreement on cooperation and investment in a new platform for tracking the path of diamonds from the place of production to the final sale.
The platform includes an electronic log of interactions between the supplier, buyers, and third parties. DLT allows them to save and encrypt information related to the time and place of the transaction, as well as the participants. It verifies all the details of deals on the turnover of precious stones in real-time without disclosing confidential data. This allows you to trace the supply chain of diamonds from the place of origin and extraction to the final consumer.
What Are the Main DLT Benefits?
– The key advantage is a high level of security thanks to an innovative storage system for information in a database distributed throughout the network. Such a system is almost impossible to hack, and the data stored in it cannot be altered or tampered with.
– Ability to make fast and cheap transactions by eliminating the need for the involvement of any third parties, intermediaries, or a central regulator.
– High level of transparency, automation, and efficiency. Control over the network is with users and is distributed throughout the network.
What Are the Prospects for DLT
Thanks to Bitcoin and the blockchain that underlies it, distributed ledger technology has become widespread and famous globally, but still remains relatively new and evolving. In addition to cryptocurrency and finance, DLT has a wide range of potential applications in different areas.