What Is A Ledger?
A ledger is a system that keeps and tracks records. Cryptocurrency ledger takes its root from the ancient record-keeping system. Ledger outside of cryptocurrency has been around for a long time. A user used the ledger system in virtually every aspect of commodity exchange. This has now been adopted by cryptocurrency. The coming of cryptocurrency brought them to the limelight again. Digital cryptocurrency was built on the same philosophy. The only difference is that the ledger in the digital currency world keeps track of digital information, recording them and validating them in the public domain.
Although the digital ledger is a public system, the info stored on it is safe. It ensures every’ identity of the participants is anonymous with their corresponding digital currency balance, and it also records every actual transaction carried out with partners in the same network.
Digital currencies are not centralized and encrypted; coins and tokens make it very easy to transfer value within an ecosystem because they involve the transfer of value. A digital ledger is created to track this transfer of value. In the process of transfer, the participants’ identities are kept safe and anonymous.
The ledger on creation is then shared throughout the world to all participants who then have a copy and can easily track and monitor every form of transaction in the system. Through the distributed ledger, each participant has access to the true state of the system. They can easily know the number of crypto tokens available in the market. Furthermore, with consensus algorithm and encryption technology, the identity of each member is kept.
A ledger is usually opened at the onset of a digital asset’s introduction into the market.
To understand this concept, imagine you transferred money to someone, say $100; your bank will have a look at your account balance and record it to ensure you have the amount before sending them to your friend. A cryptocurrency ledger is something like that; it is a data storage or management digital platform that takes notes and validates every transaction going on.
All forms of tracking and monitoring goings-on on the account, that is, transactions are made easy through the platform of the ledger.« Back to Glossary Index