What is a Distributed Ledger?

A distributed ledger is a database shared and synchronized across multiple nodes. Unlike a centralized database controlled by a single entity, a distributed ledger is maintained by a network of participants (nodes), each holding an identical copy of the data. When a new transaction is proposed, nodes reach agreement through a consensus mechanism before the transaction is added. This architecture provides several key advantages: no single point of failure, censorship resistance, and trustless verification. The concept dates back to the 1990s, but it was Bitcoin in 2008 that demonstrated a practical implementation at scale.