DLT
Get familiarize with the terms Distributed Ledger
What is Distributed Ledger Technology (DLT)/
Blockchain?
Distributed Ledger Technology (DLT), commonly implemented as blockchain, is a decentralized digital system that records transactions across multiple computers in a secure, transparent, and tamper-proof manner. Unlike traditional databases controlled by a central authority, blockchain operates on a peer-to-peer network, ensuring immutability, cryptographic security, and real-time consensus.
Definition and Key Features
- 1.Decentralization: No single point of control or failure.
- 2. Transparency: All participants can verify transactions.
- 3. Security: Cryptographic hashing prevents fraud and unauthorized changes.
- 4.Smart Contracts: Self-executing agreements that automate processes.
The Potential of DLT/Blockchain
DLT/blockchain has transformative potential across industries by enabling:
Trustless Transactions: Eliminates intermediaries, reducing costs and delays.
Financial Inclusion: Provides unbanked populations access to digital finance.
Supply Chain Transparency: Tracks goods from origin to consumer.
Identity Management: Securely stores and verifies digital identities.
Cross-Border Efficiency: Facilitates instant, low-cost global payments.
The Potential of DLT/Blockchain in the Financial Ecosystem
The financial sector stands to gain immensely from blockchain through:
- Instant Settlements: Reduces transaction times from days to seconds.
- Cost Reduction: Lowers fees for remittances, payments, and compliance.
- Interoperability: Bridges banks, mobile money, and crypto networks.
- Regulatory Compliance: Automates KYC/AML with auditable trails.
- Tokenization: Unlocks liquidity for assets like real estate or commodities.