TECHNOLOGY
As financial institutions and governments explore the transformative potential of distributed ledger technology ( DLT ), it ’ s clear the innovation promises to revolutionise everything from cross-border payments to digital identity systems .
Yet , significant implementation challenges remain .
World Bank Group
The Evolution of Distributed Systems At its core , DLT represents a fundamental shift in how digital information is stored and shared .
Unlike traditional centralised databases where a single authority maintains and controls data , DLT creates multiple identical copies of a ledger across a network of computers , known as nodes .
Each node maintains a complete , up-to-date copy of the ledger , with new entries requiring consensus from the network before being added .
These consensus mechanisms vary significantly between implementations .
In permissionless systems like Bitcoin , ‘ proof of work ’ requires miners to solve complex mathematical problems , with the network calibrated to produce valid proof-of-work approximately every 10 minutes .
This process currently consumes electricity equivalent to Ireland ’ s consumption and could reach Denmark ’ s level by 2025 .
In contrast , permissioned networks used in financial services employ more
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