Blockchain Vs. Distributed Ledger Technology

Is there a distinction between Blockchain technology and distributed ledger technology? No. This is a frequent misunderstanding held by many people. This post will look at what Blockchain is and how it differs from distributed ledger technology.

We live in a digital age where sound bites and terminology rule. In today's world, even complex technological solutions are reduced to five words or less. As a result, more astute businesses are attempting to profit from the so-called crypto frenzy. Some people are even changing their names to include the word "blockchain."

In the short term, using buzzwords like blockchain technology to attract investment will only pay off. Ironically, such behavior is to blame for the technology's poor branding. This is one of the reasons why many people are wary of Blockchain. Meanwhile, recent trends suggest that distributed ledger technology can provide genuine value and benefits while avoiding the hype.

Blockchain has been in the headlines almost every day since the rise of Bitcoin and other cryptocurrencies. Distributed ledgers, on the other hand, haven't gotten nearly as much press. When terms like distributed ledger technology and Blockchain are combined, they usually raise more questions than they answer. This is all before you throw Bitcoin into the mix to further confuse the waters.

Many people use the phrases "blockchain" and "distributed ledger technology" interchangeably. Now is the moment to go deeper and find out what lies beneath the buzzwords. Even though these phrases have gotten entangled in recent years, it is critical to separate them.

What is a Distributed Ledger, and how does it work?

A distributed ledger is a decentralized database, that is, spread out among multiple computers or nodes in this technological age. Each node will maintain the ledger, and any data changes will be reflected in the ledger. At each node, the update is done independently.

In terms of authority, all nodes are on an equal footing. The database is managed by no single control or server, making the technology transparent. Any node can update the ledger, and other nodes will verify the existence of the ledger.

The procedure is pretty simple. Nodes will use the consensus algorithm or voting to verify the transaction. The voting rights or participation of all nodes, on the other hand, will be determined by the rules of that ledger.

As a result, sometimes all nodes can participate, while other times, only a subset of nodes may.The transaction is recorded on the ledger once all nodes have given the signal, and all nodes may get the revised status. So, what are the advantages of this technology?

This technology will provide a great deal of transparency, won't it?

However, because there is no central authority, distributed ledger technology delivers a high level of security. There is no single authority in the network. There will be a possibility for nodes to complete the verification, but that will be it. Therefore, there is no way for this technology to be corrupted. This makes it an appealing solution for the financial industry and any other sector seeking more transparent technology and a move away from a centralized authority.

What is Blockchain, and how does it work?

The Blockchain is nothing more than a distributed ledger. DLT is the technology that gave birth to the Blockchain. However, it grew in popularity over time, surpassing the entire concept of distributed ledger technology.

On the other hand, many developers are now attempting to emerge from the blockchain shadow. That is why many are curious about the differences between Blockchain and distributed ledger technology.

The Blockchain is a distributed ledger system that allows each node to have its copy of the ledger. When someone adds a new transaction to the ledger, it is updated in all copies. Before being added to the ledger, all transactions are encrypted.

In contrast to DLT, Blockchain does not require a central authority to manage operations. It is, in reality, entirely decentralized. Computational trust is required by tight security protocols. The Blockchain is named after the way it arranges data in terms of blocks. For security, these blocks are linked together and encrypted.

Blockchain supports only adding operations, i.e., you can add new data but not change or delete existing data. This is one of the characteristics that distinguish it from other databases. Every transaction is recorded in history since you can't change or delete a single block of data.

As a result, it is one of the most transparent technologies, particularly in the financial sector.

It's also why the blockchain market is predicted to grow from half a billion dollars in 2018 to 2.3 billion dollars in 2021. According to certain estimates, the market will be worth 16 billion dollars in 2024.

Difference Between Blockchain and Distributed Ledger Technology

Despite the fact that the phrases Blockchain and distributed ledger sound similar, they are not synonymous. Despite the fact that blockchains are a type of distributed ledger, not all distributed ledgers are blockchains.

We've listed some of the unique aspects of Blockchain and distributed ledgers to help you better understand the DLT vs. blockchain technology comparison.

Block Structure

The first contrast between Blockchain and distributed ledger systems is their structure. A blockchain is made up of data blocks. This is not, however, the original data structure for a distributed ledger. Simply put, a distributed ledger is a database that is distributed over numerous nodes. However, this information can be represented in a variety of ways in each ledger.


Blockchain technology's blocks are ordered in a certain order. In contrast, a distributed ledger does not require a perfect data sequence.

Proof of Work

In the vast majority of cases, blockchains employ the proof of work process. Other techniques are available. However, they frequently use power. Distributed ledgers, on the other hand, do not require consensus and are therefore more scalable.

Blockchain is a subset of distributed ledger technology that goes beyond typical DLTs in terms of capabilities. The distinction between a distributed ledger and a Blockchain is proof of work.

Real-World Applications

Implementation is crucial when it comes to comprehending the distinctions between Blockchain and distributed ledger. Because of its widespread adoption, Blockchain has a plethora of real-world applications, with more being developed all the time. Because so many companies are adopting blockchain technology and gradually integrating it into their systems, you'll find big brands like Amazon, IBM, and others providing good Blockchain as a Service solution.

Developers, on the other hand, have just recently begun to delve into the core of distributed ledger technology. Despite the fact that there are many distinct types of DLTs in the computer industry, there are only a few real-world applications for them. They are, however, still in development, and real-world applications will be available soon.


Tokens or any other form of payment are not required with distributed ledger technology. Tokens may, however, be required to prohibit and identify spam.

Anyone can run a node with blockchain technology. Although running a full node demands a large network that can be difficult to manage. Furthermore, token economies are every day and play an essential part in blockchain technology. On the other hand, modern blockchain technology is looking for a way out of the bitcoin shadow.