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Distributed ledger

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Definition Edit

A distributed ledger is

essentially an asset database that can be shared across a network of multiple sites, geographies or institutions. All participants within a network can have their own identical copy of the ledger. Any changes to the ledger are reflected in all copies in minutes, or in some cases, seconds.[1]

Overview Edit

The assets can be financial, legal, physical or electronic. The security and accuracy of the assets stored in the ledger are maintained cryptographically through the use of "keys" and signatures to control who can do what within the shared ledger. Entries can also be updated by one, some or all of the participants, according to rules agreed by the network.

Underlying this technology is the "block chain," which was invented to create the peer-to-peer digital cash Bitcoin in 2008.

Use in government Edit

Distributed ledger technologies have the potential to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services. In [health care], the technology offers the potential to improve health care by improving and authenticating the delivery of services and by sharing records securely according to exact rules. For the consumer of all of these services, the technology offers the potential, according to the circumstances, for individual consumers to control access to personal records and to know who has access ed them.

Security Edit

[D]istributed ledgers are inherently harder to attack because instead of a single database, there are multiple shared copies of the same database, so a cyber-attack would have to attack all the copies simultaneously to be successful. The technology is also resistant to unauthorised change or malicious tampering, in that the participants in the network will immediately spot a change to one part of the ledger. Added to this, the methods by which information is secured and updated mean that participants can share data and be confident that all copies of the ledger at any one time match each other.

But this is not to say that distributed ledgers are invulnerable to cyber-attack, because in principle anyone who can find a way to 'legitimately' modify one copy will modify all copies of the ledger. So ensuring the security of distributed ledgers is an important task and part of the general challenge of ensuring the security of the digital infrastructure on which modern societies now depend.

References Edit

  1. Distributed Ledger Technology: Beyond Block Chain, at 5.

Sources Edit

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