A distributed ledger is a database of replicated, shared, and synchronized digital data that is geographically spread across multiple sites in a network. Distributed ledgers rely on similar principles of consensus to a blockchain. Although distributed ledger technology and blockchain share the same conceptual origin and purpose — a decentralized database or log of records, they are not exactly the same. Even though they are different, the terms Blockchain and Distributed Ledger Technology (DLT) are often used interchangeably. This has led to a significant amount of confusion. So, what’s the difference?
By enabling the digitization of assets, blockchain technology is driving a fundamental shift from the Internet of information, where we can instantly view, exchange and communicate information to the Internet of value, where we can instantly exchange assets. A new global economy of immediate value transfer is on its way, where big intermediaries no longer play a major role. Blockchain will profoundly disrupt hundreds of industries that rely on intermediaries, including banking, finance, academia, real estate, insurance, legal, healthcare and the public sector — amongst many others.
Nobody really knows precisely when blockchain technology and cryptocurrencies will mature and reach mainstream adoption. What is becoming clearer, however, is that blockchain technology is on track to become a transformative and disruptive force. Yes, market conditions and sentiment are bad, there are many average projects out there, and some critical technological shortcomings still need to be overcome. If you zoom out a bit, get some perspective and put the current market into context, you’ll realize that blockchain is on a rather typical journey to maturity and mainstream adoption.
Blockchain technology can serve as the digital foundation for the smart cities of the future helping governments raise their attractiveness and amplify their competitiveness in the new digital economy where human capital and industry are vital to success. Governments that embrace blockchain and distributed ledger technologies to reform civil services will be rewarded with a robust and agile digital infrastructure built for the hyper-connected and digitally-based economy that enables the cultivation of productive ecosystems, better public services, lower costs, and improves sustainable outcomes for all.