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Blockchain vs. Distributed Ledger Technology

In this fast-moving information age, it has become quite confusing for many to differentiate one technology from another. Many people unfamiliar with new-age technologies are often tricked by cunning businesses that rebrand Blockchain in their name. Things like this may attract some short-term gains, but in the long term, they end up alienating people from new-age technologies like Blockchain and Distributed Ledger Technology.

Are these two technologies the same? Well, they are certainly revolving around the same things in many aspects, but they are not the same as told by many. So, here we will know not just the differences and some real-life use cases of both the technologies but also what the Blockchain Vs. Distributed Ledger Technology comparison is about.

What is Blockchain?

Think about Cryptocurrencies and Blockchains, which are much similar to Kleenex and facial tissues. The former forms the latter, although it became popular and became ingrained into the minds of some. Blockchain developers say a blockchain is a shared database containing information requiring confirmation and encryption. An easier approach to understanding this is to imagine it as an Office 365 document with the best security and verification. Every document entry depends in direct relation to its predecessors. The word Blockchain means “blocks” grouped within the chain of transactions. It enables cryptography using hash technology to do so in a secure environment.

How does Blockchain work?

In Blockchain, all transaction phases are produced by data blocks referred to as blocks. As the transactions continue, new units form chains, hence the name. Like cryptocurrencies like Bitcoin, encryption software ensures that nobody can ever delete or change a block. Dozens of networks have used the underlying Blockchain software to record transactions in which the software runs on multiple devices.

What Is Distributed Ledger Technology (Dlt)?

Distributed Ledger Technology may be confusing, but that’s not the case. A Distributed Ledger is a decentralized database spread across several computers or nodes, and every node must maintain the ledger. Even if any data update happens, the ledger gets updated, and this update occurs independently at each node, and other nodes will verify it.

The verification of all the transactions happens through a consensus algorithm, and this process is quite easy, but again the voting right or participation of all the nodes in the ledger will depend on the rules of that ledger. There are many ledgers where all nodes can participate, while in some, only select ones participate.

In Distributed Ledger systems, all the nodes have an equal status in terms of authority; to make it a transparent technology, there is no central authority or any centralized server management database.

What Are the Different Types of Distributed Ledger Technology (Dlt)?

Blockchain experts believe that blockchain technology is most commonly used for digital trading. But they aren't all alone. The industry's most popular Distributed Ledger Technology type can be split between public and private. It's decentralized so that anyone not located anywhere can make a difference in the transactions between the parties. Public Distributed Ledger Technology depends on consensus from each node. Privates. Then a. Most commonly employed for business use as a company database. The network uses permissions allowing different ledgers to remain synchronized across nodes. There are still some owners that have control over who gets access. Consortiums. The Consortium Distributed Ledger Technology uses the same company association for all the network services connected to the network.

What Is the Difference Between Them? Blockchain vs. Distributed Ledger Technology?

The key difference is that Blockchain is a Distributed Ledger, but at the same time, not all distributed ledgers are Blockchain, as Blockchains are a series of block structures. A Distributed Ledger provides more scaling and flexibility for a distributed data system. The concept of distributed ledgers has always been appealing because it eliminates all the intermediaries involved. Like Blockchains, distributed ledgers do not require any blocks to store data. Distributed ledgers are a database that can be distributed across multiple sites, regions, and participants.

Block Structure

One of the first things to observe is the presence of the Blocks in the structure of Blockchain, but this structure is not the genuine data structure of distributed ledgers. Whereas in the case of Distributed Ledger Technology, it can be spread across multiple nodes as it’s simply a database, where you may represent this data in different ways in each ledger.

Again from the perspective of architecture, Blockchains are quite different Smart Contracts are individual blocks of code that are not there in the Distributed Ledger Technology.


This is another thing that can be found in Blockchain technology, as all blocks are arranged in a particular sequence. This is unheard of in the Distributed Ledger Technology, as any specific sequence of data arrangement is not required in it, and this makes Blockchain different from any other Distributed Ledger Technology.

Proof-of-Work: Power-hungry Consensus Mechanism

The notorious power-hungry Proof-of-Work mechanism in most Blockchains is known to hog up much power for itself, which slows down the network. No wonder there are many other mechanisms too, but they also use some of the other consensus-achieving mechanisms that consume much power compared to Distributed Ledger Technology.

In the case of Distributed Ledger Technology, this is not the issue as they don’t need such a consensus-achieving mechanism; therefore, they are much more scalable and power resilient.


Tokens are yet another major difference between Blockchain Vs. Distributed Ledger Technology; as in Distributed Ledger Technology, there is no need to have tokens or any kind of currency on the network. Now, in case of an event of spamming or there is a need for anti-spamming detection, one may feel the need to use tokens.

In the case of a Blockchain network, there is a need to have some sort of token economy, as here, anyone can run a node, and many times it becomes much more tedious to manage such a network full of nodes.

These tokens play an important part in Blockchain technology, as with tokens, anyone can run a full node but again, to solve a new block takes a lot of resources. One can participate in any system by verifying transactions and new blocks.

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Modern Blockchain Technology: An Encoded and Decentralized Database

Unlike other forms of Distributed Ledger Technologies (DLT), Blockchains rely on decentralized and encoded databases which serve as ledgers to record transactions, and cryptographic algorithms are employed for every updated transaction. Blockchain technology was developed around cryptocurrency, specifically bitcoin. This connotation is gone. We'll not discuss the Blockchain, if not Blockchain technologies.

What Are the Various Distributed Ledger Technology Differences?

Although some financial companies use acronyms such as the LTL acronym, it is relatively straightforward for anyone with a financial background. Distributed ledgers are databases that exist at multiple locations or among multiple participants. In contrast, companies currently rely upon centralized databases located in a fixed area. Centralized databases generally have one point of error. The distributed ledger is decentralized but does not require a central authority to process or validate the transactions.

Some Real Use-cases of Blockchain vs. Distributed Ledger Technology

Banking, Insurance, and Financial Services

In recent years, many large financial institutions have also initiated innovative projects focusing specifically on Blockchain for financial transactions and banking. Distributed Ledger Technology is also used or tested by insurance organizations as claim management or banking software applications where smart contracts and digital identity can serve multiple functions of financial transactions. The transfer of funds and the financing of transactions is another area that is similar to the origins of Blockchains.

The Internet of Things (IoT)

Blockchain in connectivity to the IoT ecosystem is considered an important strategy. Some vendors have specific solutions to use blockchain for IoT for many reasons, including increased trust costs and accelerated transactions. IBM has emerged as the front-line player in this area, with many vendors and industrial initiatives with newly designed and real deployments. IoT has much to do with transaction contracts and security within a shared environment.

Supply Chain Management and Logistics

It takes quite an expensive route between the manufacture and even designing of a product to purchase at a shop or online. When you keep track of every transaction, endless possibilities can emerge, notably where an item is made. Blockchain is used in many industries such as Supply Chain Management, Transport, and Logistics.

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Blockchain development services as a technology have been developed to make Distributed Ledgers more secure and more transparent. This system consists of electronic transactions and digital relationships. This gives organizations the clarity they need and provides greater confidence.

Blockchain technology is a new subset technology of Distributed Ledger Technology, having much more functionality, and Distributed Ledger Technology is not an exact replacement for Blockchain. One cannot completely separate them because the two are incompatible. Blockchains are capable of achieving some feats which alone Distributed Ledger Technology could not achieve, so it would be wise to say that Blockchain took Distributed Ledger technology to the next level where it can bring value to all.

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