Distributed Ledger Technology (DLT) is a decentralized digital database that stores records and transactions of data across a distributed network of computers. It is an efficient, secure, and cost-effective way to store transactional data without the need for centralized databases or other third parties. DLT provides users with greater transparency and control over their own assets while eliminating intermediaries who can create delays in settlement times or increase transaction costs.
DLT works by having each node in the network store its own copy of the ledger, which is then validated against all other nodes in the system to ensure accuracy. This process helps prevent tampering as any changes made must be approved by every node before being accepted into the ledger. Since it’s spread out across multiple locations, there’s no single point of failure that could compromise its security which makes it more robust than traditional systems. Furthermore, smart contracts can be used on top of DLTs to automate certain processes such as payments or asset transfers between two parties without needing an intermediary like a bank or broker.
In recent years, DLT has been gaining traction due to its potential applications within various industries including finance, healthcare and government services among others. By providing an immutable recordkeeping system that can track transactions securely without relying on central authorities or trusted third parties, DLTs have become increasingly attractive solutions for businesses looking to reduce costs while increasing efficiency and transparency throughout their operations. Additionally, many new cryptocurrencies are using this technology as their underlying blockchain infrastructure because it allows them to facilitate fast peer-to-peer payments with lower fees than traditional payment networks like Visa or Mastercard offer today.