Distributed ledger

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A distributed ledger is a digital record-keeping system that is shared across multiple computers or nodes in a network. Unlike traditional centralized databases, where a single authority controls the data, a distributed ledger ensures that all participants have access to the same information. This setup enhances transparency, reduces the risk of data tampering, and eliminates the need for intermediaries. Each time a new transaction is added, all copies of the ledger are updated simultaneously, maintaining consistency across the network.

What is distributed ledger technology (DLT)? It is essential for grasping how modern decentralized systems operate. DLT underpins blockchain technology, but not all distributed ledgers use blockchain. Some use alternative mechanisms for validating and recording transactions. By removing central points of failure, distributed ledgers improve security and resilience, making them ideal for financial systems, supply chains, and digital identity management.

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