Distributed Ledger VS Traditional Ledger

For the traditional ledger, always has only one copy ledger or more than one, but it is designed to impose restrictions on owners. However, the distributed ledger can allow multiple ledgers existing in a distributed way and maintaining the ledgers for users at the same time. According to the recording way, the distributed ledger can be further divided into two categories.

In a distributed ledger, the first is to allow only credible person to keep accounts, and the second is for anyone. As we know, Bitcoin is belonging to the second category. Compared with the centralized traditional accounting, Bitcoin has come to another extreme——the distributed accounting, so as to bring many problems like the more vulnerable attacks. At present, the block chain technology prefers to use the first category, randomly select the accounting owner from the trusted nodes. That is to say, each node has its own credit rating to know whether it is suitable for accounting. Meanwhile, the credible nodes learn nothing about accounting, it is decided by a random algorithm.

The distributed ledger has four characteristics:

• First, allow multi-ledgers;
• Second, the ledger itself is protected by cryptography;
• Third, the maintainer of the ledger is determined by distributing consensus algorithm;
• Fourth, the credibility of the ledger is proved by mathematics, and the algorithm is opened, then the strength of reliability can be designed according to the different application requirements.

Type	Traditional Ledger	Distributed Ledger
Shared Mode	Non-shared/ Authorized sharing	Multi-party distributed sharing
Storage Mode	Centralized storage、Single copy	Distributed Multi-copy
Verifying & Audit	Audited by center through process	Audited by all participants through algorithm
Accounting Right	Specified by center	Specified by distributed consensus algorithm
Cryptography Protect	Cryptography	Public key+Private key+Hash chain+ Multi-party signature
Real-time	Several days-Several seconds	10 minutes-Several seconds
Maintenance Cost	1	1/10-1/100

Compared with the traditional ledger, the characteristics of real-time and maintenance cost for the distributed ledger has determined its superiority. For the real-time side, the process of verifying and auditing takes long time in a traditional way, even for several days, but it will be very fast in a distributed way. And then the issue for information transferring is no longer a factor. For the maintenance cost, the foreign banks have drawn a conclusion,  if the distributed ledger can substitute the traditional ledger, then the maintenance cost can be reduced to the one tenth even to one percent of the previous.

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