DLT (Distributed Ledger Technology)

Unlike centralised systems where data is stored in a single location, DLT allows multiple authorised users to access and edit data simultaneously. All changes to the ledger are approved by users according to a consensus algorithm.

In simple terms, DLT is a secure database that can be accessed by several users from different locations at the same time. The data is synchronised in real-time and cannot be fully controlled by any single party, with security ensured by cryptographic keys and signatures.

The first effective example of DLT is blockchain (for more details on what blockchain is, see our related article). However, blockchain and DLT are not synonymous: DLT is a broader concept, with blockchain being a specific implementation of it.

DLT can be applied in any industry where data is collected and processed. It is already being used today in sectors such as aviation, education, healthcare, utilities, insurance, and more.

DLT features

The features of Distributed Ledger Technology (DLT) include:

• Absence of centralised regulation;
• Transparency – all users can view the changes made;
• High level of security due to encryption and data storage across a decentralised network of computers;
• Efficiency and high speed of data exchange.

Types of distributed ledgers

• Public – open-source ledgers that can be modified by any user with access to the database.
• Private – ledgers with restricted access, allowing modifications only by a specific group of users or representatives of a particular organisation. These are used for information storage and auditing.
• Federated – ledgers that can only be updated by designated individuals who manage them. They are commonly used in the banking industry.

Challenges of distributed ledger technology

Despite its numerous advantages, DLT faces some challenges, including:

• Technological complexity;
• Scalability issues;
• Lack of comprehensive regulation, which can lead to potential legal problems.