Shared records without a central authority.
WHAT A DISTRIBUTED LEDGER IS
A record replicated across participants, where agreement is reached without a central authority.
WHAT CONSENSUS MECHANISMS DO
Establish agreement on what is recorded.
WHAT THE MAIN APPROACHES ARE
Requiring computational work Requiring staked value Agreement among known participants
WHAT THE LAST ONE SUITS
Consortiums where participants are identified.
WHAT SMART CONTRACTS ARE
Code executed by the network, with results recorded.
WHAT MAKES THEM UNUSUAL
Frequently unchangeable once deployed, with every operation costing a fee, and errors irreversible and financial.
WHAT THAT DEMANDS
Extensive testing, audited libraries, and independent review before deployment.
WHAT THE TECHNOLOGY GENUINELY PROVIDES
A record no single party controls Verifiable history Execution without a trusted intermediary
WHAT IT DOES NOT PROVIDE
Truth about the physical world Reversibility of mistakes Performance comparable to centralised systems Privacy, by default
WHAT TO ASK OF ANY PROPOSED USE
Does this require the absence of a trusted party?
WHY
If a trusted party exists and is acceptable, a database is simpler, faster and cheaper.
WHAT TO ESTABLISH
The regulatory position, which varies and is changing.
