What are the characteristics of a distributed ledger?

The characteristics of distributed ledger include: 1. Technology substitution; 2. Scalable ledger; 3. Brand new global C&S infrastructure; 4. Uber financial model.

The operating environment of this article: Windows7, Dell G3

What are the characteristics of distributed ledgers?

Distributed ledger is a database that is shared, replicated and synchronized among network members. Distributed ledgers record transactions between network participants, such as the exchange of assets or data. This shared ledger reduces the time and expense associated with reconciling different ledgers.

A distributed ledger (also known as a shared ledger, or distributed ledger technology) is a replicated consensus that shares and synchronizes digital data that is geographically distributed across multiple sites, countries, or institutions . There is no central administrator or centralized data storage.

A peer-to-peer network is required, as well as a consensus algorithm to ensure replication across nodes. A form of distributed ledger designed for blockchain systems, which can be public or private. But not all distributed ledgers must necessarily employ chained blocks to successfully provide secure, efficient implementation of distributed consensus: blockchain is simply a type of data structure that is considered a distributed ledger. In 2016, many banks tested distributions for BoP.

Participants in the network restrict and negotiate updates to records in the ledger based on consensus principles. There is no intermediary third-party arbitrator (such as a financial institution or clearinghouse) involved. Each record in the distributed ledger has a timestamp and unique cryptographic signature, making the ledger an auditable history of all transactions in the network.

Application

Technological Substitution

This represents the limited subversion of blockchain technology introduced by current market operators . From a technical perspective, this is the easiest scenario to achieve, because if there are any market structure changes, this can be implemented the fastest. From a business perspective, this offers minimal cost savings to the market, which can be seen as a stepping stone for further evolution.

Scalable Ledger

Technical replacement can be expanded to provide a scalable ‘smart ledger’. This scenario can be achieved through the cooperation of industry participants. Creating a fully open, collaborative platform for major capital markets infrastructure while meeting all applicable regulations is a huge challenge that cannot be achieved in the short term.

New global C&S infrastructure

A consortium of global intermediaries, banks and C&S providers collaborating on a next-generation distributed ledger C&S platform, this scenario This is already possible through the R3 Blockchain Alliance. However, it will take many years for such a scenario to be realized, and it can only be done step by step.

Uber Financial Model

Distributed ledger technology is a truly global peer-to-peer network that can replace the traditional capital market system. There are several technology platforms that provide this service. Already exist in some form or are still under development, but it is unclear whether these technology platforms will pose challenges to traditional market infrastructure. As we have seen with other peer-to-peer technologies such as Bitcoin and Uber, a certain degree of interoperability with applicable regulatory frameworks is key to mainstream acceptance.

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