Have you heard about Distributed Ledger Technology or DLT?  It is also known as a shared ledger. It is a digital system that lets users and systems record transactions related to assets, data, supply chain, votes, etc. A distributed ledger technology stores the information at multiple locations at any given point in time but unlike databases, they don´t have a central place where information is stored.

It becomes more and more important to understand DLT because one of the main technologies that are under its umbrella, although not the only one, is blockchain and nowadays blockchain is having an immense application in our day-to-day chores.

DLT has three main elements or features that make this kind of technology unique, efficient, scalable, and secure: Decentralization makes it work as a network with multiple transactions and low maintenance, Consensus Algorithms to avoid malicious outcomes like a conflict of ownership or disagreements, and cryptography which enables users to securely propose changes or transactions to the network.

The next thing we need to have in mind is that DLT works with digital assets. If it is not that clear to you what a Digital asset is please see the following graph from UBS:

Although digital assets are the core of a well-functioning DLT ecosystem some stakeholders play a crucial role in nurturing it which based on their main activities are:

Developers: the ones that create crypto coins, tokens, and the applications to use them.

Validators & Miners: They verify and settle the movements of these assets among the blockchain.

Exchanges:  Let´s call them “digital banks” they offer users the possibility to trade digital assets which can either be regulated (centralized) or unregulated (decentralized) using private keys.

Users: They benefit from trading and exchanging their digital assets and move them around the ecosystem.

Supporting services: They assist all the other participants in matters like security, audit services, improvements, identifying bugs, and infrastructure.

Now that you have the basis of how Distributed Ledger Technology works you will want to know more about it and how it applies to our daily lives. Its adoption is forthcoming in numerous ways, to have an idea please see the graph below:

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Source: https://www.ubs.com/global/en/wealth-management/chief-investment-office/market-insights/house-view/daily/2021/latest-17092021/_jcr_content/mainpar/toplevelgrid/col1/textimage_2112742085.1503773798.file/dGV4dD0vY29udGVudC9kYW0vYXNzZXRzL3dtL2dsb2JhbC9jaW8vbWFya2V0LWluc2lnaHRzL2RvYy9ob3VzZS12aWV3LWRhaWx5L2RpZ2l0YWwtYXNzZXRzLXJlcG9ydC1maW5hbC5wZGY=/digital-assets-report-final.pdf