A record of financial transactions that cannot be changed, only appended with new transactions.
In the world of
cryptocurrencies, a ledger is known as a record-keeping system. The ledger keeps track of different participants’ balances and all
transactions that take place. However, the participants’ identities remain
anonymous.
Public ledgers were used much prior to the birth of
digital assets, but have risen more in prominence since the crypto markets roared to life. Both parties involved in a cryptocurrency transaction can verify the details on the ledger.
Blockchain is a key type of
distributed ledger technology that records a list of financial transactions or
blocks that cannot be changed, making it
immutable. Ledgers tend to be
decentralized, meaning that they are not overseen by a single central authority. Once a block reaches full capacity, new ones are added to the ledger — and select
network participants dubbed as full
nodes also retain a copy of the ledger. This means they have oversight of the network, the people who use it, and whether transactions are genuine.
There are many challenges in using a ledger. The nature of blockchain requires every transaction to be recorded on the network — and there can also be security concerns. These relate to fears that hackers, governments and security agencies can track public records and information about network participants.