Crypto glossary

Distributed Ledger

A distributed ledger is a record of transactions that is stored and verified by multiple network participants, rather than kept by a single central authority. Blockchains are the best-known type of distributed ledger.

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From one ledger to many copies

A traditional ledger, like a bank's account book, lives in one place and is controlled by one organization. Everyone else has to trust that it is accurate. In a distributed ledger, many participants, called nodes, each hold a copy. When a new entry is added, the nodes follow an agreed procedure, a consensus mechanism, to decide which updates are valid and in what order, so all copies stay in sync.

Because no single copy is the master, there is no single point of failure, and altering the record would require persuading or overpowering many independent parties.

Distributed ledger versus blockchain

Every blockchain is a distributed ledger, but not every distributed ledger is a blockchain. A blockchain organizes data in a chain of blocks linked by hashes. Other designs exist: Hedera uses a structure called a hashgraph, and some enterprise systems record transactions without grouping them into blocks at all. The umbrella term DLT, distributed ledger technology, covers all of them.

Ledgers also differ in who may take part. Public, permissionless ledgers such as Bitcoin let anyone run a node. Permissioned ledgers, often used by banks and companies, allow only approved participants, which makes them faster to run but much closer to a shared database among known partners.

Where DLT is used

Beyond cryptocurrencies, distributed ledgers are used or tested for settling securities, tokenizing assets, tracking supply chains and moving money between financial institutions. Several regulators have created specific rules for DLT-based securities; Switzerland, for example, adopted a DLT law that took full effect in 2021.

Limits

Distributing a ledger adds cost and complexity. If the participants all trust one operator anyway, a normal database is usually simpler. And a distributed ledger cannot verify real-world facts by itself: it records what it is told, accurately and permanently.

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Frequently asked questions

Is DLT the same as blockchain?

No. Blockchain is one type of distributed ledger technology. DLT is the broader category that also includes non-block designs.

Who controls a distributed ledger?

It depends on the design. In public ledgers control is spread across anyone who participates; in permissioned ledgers a consortium decides who may join.

Is a distributed ledger secure?

It is resistant to a single party altering records, but its security depends on the consensus mechanism, the number of independent participants and the software's quality.

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All glossary terms · Educational reference only — not investment, legal, tax or financial advice.