Web3 is indeed an amazing technologies out there and is showing massive growth. its one of the most fascinating technology we have. The idea behind this technology is to provide ownership to the user or web consumer, and here the idea of Decentralization come into picture. In the earlier webs like (web1 and web2) there was a centralized system that was governed by one or a group of authorities, hence the user's data was in the hands of a few people having charge of those authorities. As a consequence "if a server crashes out, user's data compromises" also "if a hacker or attacker hacks the server, then all the data which is stored in that server will get compromised, and user's privacy will get compromised too.
To minimize this, The idea of Web3 was introduced which comes with the Decentralized behaviour, And it comes with so many technologies under the hood, Out of those technologies the key technology which supports this decentralized behaviour of Blockchain is "Distributed Ledgers Technology". In this blog I'll emphasize on distributed ledgers and how they're supporting the web3 world. Without any further delay lets dive in🌊
What are Distributed Ledgers?
A distributed ledger is a database that is widely accessible and cooperatively shared across numerous locations, organisations, or geographies. It enables transactions to have "witnesses" in the public eye. Each participant can access and keep a duplicate copy of any recordings that are shared among network nodes. Any additions or modifications to the ledger are immediately reflected and duplicated to all participants. A distributed ledger, which is the kind of ledger that most businesses utilise, contrasts with a distributed ledger. A centralised ledger provides a single point of failure, making it more vulnerable to fraud and cyberattacks. The World Bank Group does not have any broad advice regarding how to use this technology for global development because it is still in its infancy. We are collaborating with standard-setting organisations, governments, central banks, and other parties to track, investigate, and test DLT and blockchain-based applications.
Since the dawn of time, ledgers have been used to record contracts, payments, buy-sell agreements, and the transfer of assets and other types of property. With the invention of paper, the journey that started with recording on clay tablets or papyrus took a giant step forward.
Computers have made record-keeping and ledger maintenance much faster and more convenient over the past couple of decades. The information saved on computers nowadays is evolving toward being decentralised, quick, and cryptographically secure. Distributed ledger technology is one method that businesses might benefit from this technology.
A distributed ledger is a ledger of any transactions or contracts that is maintained in a decentralised manner across several places and individuals, doing away with the requirement for a central authority to maintain oversight and prevent fraud. This eliminates the requirement for a central authority to approve or validate any transactions.
Advantages of Distributed Ledgers
Distributed ledgers are intrinsically more difficult to attack than centralised ones since an assault must simultaneously target every distributed copy, whereas centralised ledgers are more vulnerable to cyber attacks. These records are also hard to alter maliciously by a single party. Distributed ledgers enable high levels of transparency since they are hard to attack and manipulate. Distributed ledgers also provide for a simple information flow, which makes it simple for accountants to follow an audit trail when they analyse financial accounts. This lessens the likelihood that fraud will affect a company's financial records. The environment benefits from the usage of paper being less.
Components of Distributed Ledgers
Community
The community is the collection of individuals or organisations working toward a common objective. Nodes In a nutshell, nodes are the things you can find attached to a network.Governance
Given that it concentrates on providing the organisational framework for business networks' decision-making, governance is a crucial component of distributed ledger technology use cases.Decentralized Software
Decentralized applications (dApps), which provide a network interface for interactions between the community and the larger corporate world on a DLT network, are a key component of DLT use cases.Protocol
The term "protocol" refers to a particular set of software guidelines, requirements, specifications, and terminologies for describing how the community and network interact.Consensus
Consensus is a procedure for data exchange and transaction approval with the consent of network participants.Insightful Contracts
The self-executing programmes known as smart contracts aid with governance and protect transactions on the distributed ledger technology network.
Applications of Distributed Ledgers
1. Leveraging Smart Contracts in Streamlining Industrial Processes
2. Prevention of Identify Theft
3. Immutability and Secure Transactions
4. Finance
5. Music and entertainment
6. Diamond and precious assets
7. Artwork
8. Supply chains of various commodities