Question

How is Blockchain distributed ledger different from a traditional ledger?

Answer 1

• A Blockchain distributed ledger is highly transparent as compared to a traditional ledger.
• Blockchain distributed ledgers are irreversible. Information registered on a distributed ledger cannot be modified whereas on a traditional ledger it is reversible.
• A distributed ledger is more secure. It uses cryptography and every transaction is hashed and recorded whereas in traditional ledger security can be compromised.
• In a distributed ledger, there is no central authority. It is a distributed system and the participants hold the authority to maintain the sanity of the network and are responsible for validating the transactions. Traditional ledgers are based on the concept of centralized control, which controls all transactions.
• In a distributed ledger, identities are unknown and hidden whereas in traditional ledger identities of all participants have to be known before the transactions happen.
• In a distributed ledger, there is no single point of failure as the data is distributed and information is shared across multiple nodes. If one node fails, the other nodes carry the same copy of the information. In comparison, traditional ledgers have a single point of failure. If a single system crashes, the entire network comes to a standstill.
• In a distributed ledger, data modification or change cannot be done but for a traditional ledger, it is possible.
• In a distributed ledger, validation is done by the participants in the network while in a traditional ledger, validation is done by a centralized authority.
• The copy of the ledger is shared amongst participants in a distributed ledger while in a traditional ledger, a single copy is maintained in a centralized location. It is not shared amongst the participants.