DLT vs Blockchain: In this post Shawn uses a simple analogy to explain the difference between a blockchain and distributed ledger technology (DLT) . He also discusses the difference between blockchain and other technologies – like blockchain vs tangle, and blockchain vs databases.
Blockchain And DLT - Is there A Difference?
In a previous post, we discussed Radix DLT – a potential game-changer in the DLT world. While many of our readers were excited for what Radix promises, there were some who requested some clarity on DLTs (Distributed Ledger Technology) . One of the prevailing questions I received was:
“What is the difference between a Blockchain and DLT?”
Blockchain vs DLT: Apples vs Fruit
Comparing a Blockchain to a DLT is like comparing an Apple to a Fruit. An Apple IS A Fruit. Similarly, a Blockchain IS A DLT (Distributed Ledger Technology)
The confusion, probably, arises because most of us were introduced to the term “Blockchain” before “Distributed Ledger Technology”. The sudden surge of popularity had the term “Blockchain” turn into a generic term.
But in fact, Blockchains are a TYPE of DLT. Much like an Apple is a TYPE of Fruit.
So, is DLT a blockchain ?
No. All DLTs are NOT Blockchains. But all Blockchains are DLTs
Most of the cryptocurrencies, that we know, are blockchain implementations. All of them are DLTs. Bitcoin, Ethereum, Litecoin etc are all DLTs. What kind of DLT? Blockchains.
However, not all the cryptocurrencies are blockchain implementations. Radix, IOTA and R3 Corda are examples of DLTs that are NOT blockchains.
Bitcoin Blockchain And DLT - An Analogy
I've also received questions on whether or not the Bitcoin blockchain and distributed ledger technology have anything in common. Let's use another analogy to answer this question.
The Bitcoin Blockchain and Distributed Ledger Technology synonymous to "Google" and "Search Engine". Google is a specific type of Search Engine. Similarly, the Bitcoin blockchain is a specific type of distributed ledger technology.
Bitcoin IS a Distributed Ledger Technology (DLT).
Remember, in the previous section we discussed how a blockchain is a sub-category of a DLT. There are many types of DLTs; and blockchains are only one of them. Similarly, there are many types of blockchains; and the bitcoin blockchain is just one of them.
What is a DLT?
So what exactly is a DLT ? Again, I will attempt to make this as easy to understand as possible. A DLT – Distributed Ledger Technology – simply distributes information to multiple computers. These computers could be spread across the world. The primary aim is to reduce the risk of central storage.
Distributed Ledger Technology is the umbrella term to describe any system that distributes data across multiple sites. There are several types of DLTs.
What is A DLT?
A DLT (distributed ledger technology) is simply a fancy way of saying,
“A database that is spread across several sites“
Al blockchains are DLTs.
But not all DLTs are Blockchains
A Blockchain is a type of DLT that organises its data in a “chain of blocks”. Each block encompasses a bunch of data that is verified & validated and then chained to the next block. Hence the term “blockchain”. This data – in the form of chained “blocks” – is distributed to everyone in the network.
That’s how a Blockchain type of DLT is typically implemented. Other DLT types may choose to implement differently. Radix, Corda and IOTA are all different types of implementations of DLTs. None of which are Blockchains.
Blockchain vs Databases
This is another frequently asked question: Blockchain vs Databases – what's the difference? Technically, Databases are used within a Blockchain system. So a comparison between a Blockchain VS Databases is akin to a comparison between Heart and a Body. The heart lies within the body; and is a core part of the system. Similarly, databases are used within the Blockchain system.
Remember, DLTs are simply databases that are distributed across multiple sites. And Blockchains are simply a type of Distributed Ledger Technology. So essentially, a blockchain comprises of structured databases – that are distributed.
Blockchain vs Distributed Databases
This is where things get tricky. If a Blockchain is simply a system of distributed databases, then what's the difference between a Blockchain and a Distributed Database? This really boils down to the interpretation of a "Blockchain".
The first Blockchain system was introduced in 2008, and its goal was to escape the shackles of centralisation. Usually, when people talk about Blockchain technology, they are referring to a distributed system with no central control. However, when they talk about Distributed Databases, they are referring to high powered distributed systems that have a central authority.
To sum it up, a Distributed Database has a central authority that requires trust; while a Blockchain is typically a trustless system that has no central authority
Conclusion - DLT vs Blockchain
The key takeaway from this post is: “All blockchains are DLTs. But not all DLTs are Blockchains”. A blockchain is a specific type of DLT. Bitcoin paved the way for public DLTs. But as the market and technology matures, we will see more implementations of DLTs to satisfy the markets ever-changing demands.
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