Decentralized record-keeping is performed thanks to Distributed Ledger Technology – DLT.
DLT is the name for a digital system that records transactions related to an asset and details about it in multiple locations at once. Unlike traditional databases, DLT does not have a central data storage, nor a function of centralized administration.
In a distributed ledger, each of the nodes processes and verifies each element of the transaction. Then there is a consensus between the various nodes on the actuality of these elements.
Each node simultaneously validates and records transactions. Each record has a unique timestamp and must be cryptographically signed to pledge network security and integrity.
This technology can be used to record data that is static, such as cadaster, or dynamic data, such as transactions.
The use of such a computer architecture makes drastic changes in record-keeping, radically changing the way information is collected and communicated.
DLT is a tool for registering various forms of property, from money to real estate.
Registers, in which transactions and other similar data are recorded, have existed for centuries in paper form. They were digitized after the introduction of computers in the late 20th century, however, and these computer versions of registers were only a transfer of what was recorded from paper to digital form.
Since the creation of such records, the central authority has had to confirm the authenticity of the transactions recorded in these registers. For example, banks have an obligation to verify financial transactions.
Any change or modification to the registry must be subject to a consensus of nodes, which must guarantee the security and legitimacy of each update.
A distributed book, on the other hand, is a database of transactions distributed on a network that connects a large number of computers, which means that it is not located in a central point. In general, all members of the network can read the information and, depending on the access rights they have, make certain changes.
DLT is further transforming the way records are kept, especially thanks to sophisticated algorithms, advances in cryptography, increased computing power, and the universal power of computing. In this sense, DLT is becoming more sustainable and reliable for this purpose.
Such systems have the potential to speed up transactions because they eliminate the need for a central authority or intermediary, and at the same time can significantly reduce transaction costs.
In addition, DLT is much more consistent than other widely available systems, as each node in the network contains records, creating a system that is harder to manipulate or to attack easily.
Each of the network nodes contains records, which minimizes the possibility of such a system being attacked or destroyed or manipulated.
DLT is also a more transparent way of processing records because the information is shared and thus becomes visible across the network, which also makes it more difficult for a cyber-attack to be successful.
In this sense, the application of DLT can significantly increase transparency, eliminate corruption, tax evasion, illegal transactions and money laundering, prevent the misappropriation of property and maintain the integrity of data.
The possibilities of applying this technology exist in almost all spheres of life – from the financial sector and public administration, through the creative industries and copyright, the education and health system to transport and energy.
The presence of such systems that enable more secure data and property management, especially in public administration, contributes to the improvement of key economic sectors and the improvement of the quality of services provided to citizens.
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