Meaning
An electronic database that records transactions in a permanent and chronological order provides a shared source of truth for multiple parties. A digital ledger uses software to track changes in ownership and value without a single central authority owning the truth. It measures the history of an asset from its entry into a system until its final exit.
The boundary of its use is defined by the network protocol and the permissions granted to participants.
Sequential Logging
Entries are added to the record in a fixed sequence that cannot be easily reversed. The digital ledger prevents the double spending of assets by verifying that every new entry aligns with the previous history. Each block or line depends on the data that came before it.
Distributed Authority
Transparency allows every authorized user to see the state of the database at any time. Because the digital ledger is visible to all stakeholders, it reduces the need for frequent manual reconciliations. It replaces a private memory with a shared record.
Consensus Mechanism
Encryption and distributed storage protect the information from tampering. When a digital ledger is updated, the new state is broadcast to all participants to ensure everyone holds the same copy. It makes the destruction of evidence nearly impossible once the record is distributed.
