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A **decentralized ledger** is a digital record‑keeping system where the data (transactions, balances, or other state changes) is stored across a network of many independent nodes rather than in a single, central authority. ### Key Characteristics | Feature | Description | |---------|-------------| | **Distributed storage** | Every participating node holds a copy (or a fragment) of the ledger, ensuring redundancy and resilience. | | **Consensus mechanism** | Nodes agree on the order and validity of new entries through protocols such as Proof‑of‑Work, Proof‑of‑Stake, Byzantine Fault Tolerance, etc. | | **Immutability** | Once a record is added and confirmed by the network, it cannot be altered or deleted without overwhelming consensus, providing tamper‑resistance. | | **Transparency** | All participants can view the ledger’s history, fostering trust and auditability. | | **Permissionless or permissioned** | Some decentralized ledgers are open to anyone (e.g., Bitcoin, Ethereum), while others restrict participation to known entities (e.g., Hyperledger Fabric). | ### How It Works 1. **Transaction creation** – A user initiates a transaction (e.g., sending tokens). 2. **Broadcast** – The transaction is sent to the network of nodes. 3. **Validation** – Nodes verify the transaction against protocol rules (e.g., sufficient balance, correct signatures). 4. **Consensus** – Nodes run a consensus algorithm to agree on which transactions to include in the next block or batch. 5. **Commitment** – The agreed‑upon block is added to each node’s copy of the ledger, becoming part of the immutable history. ### Why It Matters - **Eliminates single points of failure** – No central server can be taken down to halt the system. - **Reduces reliance on trust** – Trust is placed in cryptographic proofs and consensus, not in a single institution. - **Enables new applications** – Decentralized finance (DeFi), supply‑chain tracking, digital identity, and many other use‑cases rely on the properties of decentralized ledgers. In short, a decentralized ledger is the foundational technology behind most blockchain and distributed‑ledger projects, providing a secure, transparent, and tamper‑proof way to record data without a central authority.