Unot of the concepts that we usually see in the world of cryptocurrencies, is the ledger or ledger. This is a detailed accounting record of each operation of an entity or company. Thanks to this book, a company or entity can have total control of the accounting of its operations.
Well, in the world of cryptocurrencies, a ledger allows you to do exactly the same thing. Thanks to this registry, each transaction or operation of the cryptocurrency is recorded. This allows each of these operations to be publicly reviewed or audited. The ledger is the result of gathering and organizing the information of each block that is part of the blockchain of said cryptocurrency.
In cryptocurrencies like Bitcoin o Ethereum, in the ledger each operation carried out by its users is recorded. This is so since his genesis block until today and beyond. This allows anyone to publicly review the transactions and operations carried out in each cryptocurrency. Thanks to this, cryptocurrencies offer their high level of transparency and reliability.
Ledger and blockchain. Two different things but they go hand in hand
While the concepts of ledger and blockchain technology bear many similarities, they are both completely different. On the one hand, the ledger bases its operation on a consensus system similar to that of the blockchain, but its case and structure is completely different. The ledger is a database in which all the network information is stored. By being distributed on many computers, it is guaranteed that the information of said ledger is very difficult to modify and hack adding security to the model. This can be considered essential and a first step towards blockchain technology, but it does not mean that it will necessarily build a blockchain.
On the other hand, we have the blockchain. Blockchain in a nutshell is a highly secure form of distributed accounting thanks to the use of crypto. The blockchain works on the basis of creating a linked record with all the previous records forming a chain. In this way, an unalterable record of information is created for the entire network, in which each change is made thanks to the consensus of that network. At this point it is worth noting that A blockchain is just a type of distributed ledger that stores your information in data blocks.
Another stark difference between ledger and blockchain is governance and the ability to act on it. In blockchain, most of its organizations allow community governance, allowing its users to comment on the fate and development of the blockchain. However, in organizations that use centralized or distributed ledgers, this may not be possible in any way.
Centralized Ledger vs Distributed Ledger
The ledgers can be of two centralized or distributed types. The first of them we can see for example in banks. Banks use a ledger to know each operation they perform inside and outside the bank. However, the control of said ledger is in the hands of the same bank, that is, it is centralized.
However, banks are not the only ones that use this type of ledgers. Another example applicable to cryptocurrencies can be seen in Hyperledger. Hyperledger is a project that allows you to create blockchains for private use. These blockchain have a ledger that is not publicly accessible, nor is it distributed and control is exercised by those who have created the blockchain.
On the other hand, we have the distributed ledger. These are the ones we usually see in cryptocurrencies and blockchain like Ethereum, Bitcoin, Litecoin, Dash, among other. These ledgers are publicly accessible, can be duplicated, and their security is guaranteed by the consensus of the network that manages them. No one has absolute control of a distributed ledger, as its operation is orchestrated by the entire network to which it belongs.
Thanks to these characteristics, distributed ledgers are perfect for use in cryptocurrencies or, on platforms such as decentralized exchanges such as uniswap.