It should be noted that a distributed ledger is a broad term describing shared databases; hence, all blockchains technically fall under the umbrella of shared databases or distributed ledgers.
Although all blockchains are fundamentally distributed ledgers, all distributed ledgers are not necessarily a blockchain.
A Complete Guide to Understanding This Blockchain Concept
A critical difference between a distributed ledger and blockchain is that a distributed ledger does not necessarily consist of blocks of transactions to keep the ledger growing.
Rather, a blockchain is a special type of shared database that is comprised of blocks of transactions.
An example of a distributed ledger that does not use blocks of transactions is R3’s Corda.
Corda is a distributed ledger which is developed to record and manage agreements and is especially focused on financial services industry.
On the other hand, more widely-known blockchains like Bitcoin and Ethereum make use of blocks to update the shared database.
As the name suggests, a distributed ledger is distributed among its participants and spread across multiple sites or organizations.
Why This Matters for Blockchain Technology
The fundamental idea here is that, unlike many other blockchains, the records are stored contiguously instead of being sorted into blocks.
This concept is used in Ripple which is a blockchain and cryptocurrency based global payment network.
Distributed ledgers First, I need to clarify an ambiguity. It should be noted that a distributed ledger is a broad term describing shared databases; hence, all blockchains technically fall under the umbrella of shared databases or distributed ledgers. Although all blockchains are fundamentally distributed ledgers, all distributed ledgers are not necessarily a blockchain. A critical difference between a distributed ledger and blockchain is that a distributed ledger does not necessarily consist of blocks of transactions to keep the ledger growing. Rather, a blockchain is a special type of shared database that is comprised of blocks of transactions. An example of a distributed ledger that does not use blocks of transactions is R3’s Corda. Corda is a distributed ledger which is developed to record and manage agreements and is especially focused on financial services industry. On the other hand, more widely-known blockchains like Bitcoin and Ethereum make use of blocks to update the shared database. As the name suggests, a distributed ledger is distributed among its participants and spread across multiple sites or organizations. This type of ledger can be either private or public. The fundamental idea here is that, unlike many other blockchains, the records are stored contiguously instead of being sorted into blocks. This concept is used in Ripple which is a blockchain and cryptocurrency based global payment network.
Key Points to Remember
- It should be noted that a distributed ledger is a broad term describing shared databases; hence, all blockchains technically fall under the umbrella of shared databases or distributed ledgers.
- Although all blockchains are fundamentally distributed ledgers, all distributed ledgers are not necessarily a blockchain.
- A critical difference between a distributed ledger and blockchain is that a distributed ledger does not necessarily consist of blocks of transactions to keep the ledger growing.
- Rather, a blockchain is a special type of shared database that is comprised of blocks of transactions.
Conclusion
Distributed ledgers represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.