Blockchain DLT | Blockchain | Technology | Udayan Modhe
Blockchain DLT
Before diving into Ledger systems, let us quickly understand General Ledger (being used since 15 century). It is governed by three accounting principles – First, Debit the receiver, credit the giver; Second, Debit loss and expense, Credit profit and gain and Third, Debit inflow and credit outflow. These principles are inviolable.
Centralized Ledger System
In Conventional ledger system, having intermediaries, if Lucy wants to send $10 to Bob, she sends request to the bank. Bank checks the authenticity and balance of Lucy’s account and accepts the transaction for processing. After that, through central intermediary, bank checks credentials of Bob and transfers fund to Bob. In the process, it charges transaction fees. Finally, bank creates ledger entry, with both sides of transactions and fees. Both the parties will get reflection of this central ledger into their ledger. In these transactions intermediaries have complete control over transactions.
Distributed Ledger Technology
Blockchain Distributed ledger Technology, consists of blockchain, smart contracts and consensus logic. Ledgers are distributed among users of network. In this case, when Lucy transfers funds to Bob, this transaction is broadcasted on the network for validation. The transaction is validated through a consensus mechanism. Different DLTs will have different consensus mechanisms. This write only, time stamped & immutable record is appended in the block chain as a new block. This transaction has cryptographic key and reference to previous block, making it a chain of blocks. This block gets registered to the ledger of all the users in the network, so everyone has same copy of ledger.
Blockchain has come long way in last 12 years. From public Blockchains, underpinning Bitcoin, Ethereum, etc. to Federated or Consortium Blockchains like R3 & Corda, which are adopted by banks, energy, insurance sectors to Private Blockchains e.g. Multi-chain, etc, In the last four years, with the advent of Hyperledger project, governed by Linux Foundation, few more iterations of Open Source DLTs are available for corporations to adopt, tune up and deploy.
by Udayan Modhe
linux foundation
