Ledger
Community Submission - Author: Vitor Mesk
A ledger may be defined as either a physical book or a digital computer file where monetary and financial transactions are noted down and recorded - either in the form of debits or in the form of credits. Usually, ledgers also include the balance for each individual or account that is part of that particular set of economic records, along with the date of each financial transaction.
While physical ledgers are getting less popular, digital ones are being extensively used worldwide, in many different scenarios. For instance, a company or business may use a digital ledger to keep track of its financial transactions. Ledgers may be used for tracking sales, purchases, or simply the exchange of funds between employees (or between different companies).
When it comes to digital environments,ย
blockchains can be considered as a prominent and highly efficient example of a digital ledger because it works as an immutable database. Typically, blockchains are used to track all transactions that take place between cryptocurrency users. For example, theย
Bitcoin blockchain acts as a digital ledger that stores all Bitcoin transactions inside blocks that are linked throughย
cryptographic proofs. The linked blocks form a long chain of blocks (hence, the term blockchain). After transactions are added into these blocks and blocks are confirmed, it is almost impossible for these transactions to be reversed, and this is what makes blockchain so secure and useful.
Other thanย
cryptocurrency transactions, blockchains may also be suitable for tracking and recording other types of digital data. Therefore, blockchain is more than a digital ledger, it is a distributed ledger technology (DLT) that may be employed in a wide range of scenarios, including
supply chain,ย
charity, andย
healthcare.