MAY - 2019ENTERPRISE SECURITY| | 19istributed ledger technology (DLT) holds tremendous promise for the financial services sector. At its core, a distributed ledger is a system for keeping track of transactions without the need for verification by a third party. Distributed ledgers come in many flavors, depending on who can access and use them, and how they verify transactions. The best-known use case for distributed ledgers is cryptocurrency like Bitcoin, Litecoin, or the more recent generation of stablecoins pegged to the U.S. dollar. But there are many more applications beyond currency. Distributed ledgers can help coordinate cross-border payments, finalize and execute smart contracts, and disburse payments in response to real-world events. Because distributed ledgers can be more secure and more efficient than their centralized counterparts, financial technology companies are seizing the opportunity to leverage their potential. The terms "distributed ledger" and "blockchain" are sometimes used interchangeably; blockchain technology is a specific kind of distributed ledger where transactions are verified by consensus. Each "block" in the chain is timestamped by a majority of the nodes in the network by means of solving a cryptographic puzzle; the nodes "prove" they are legitimate verifiers by expending processing power on this puzzle. Once a block is formally approved, it is added to the chain, and any other conflicting blocks (i.e., attempts to spend the same coin or verify some other contradictory transaction) are dismissed. As the chain of blocks grows larger, it becomes harder to falsify transactions, because a fraudulent actor would have to convince the entire network to abandon the former chain and adopt theirs. By Amy Zirkle - Interim CEO at Electronic Transactions AssociationCXO INSIGHTSDThe Impact of Distributed ledger technology In the Financial Services DomainAmy Zirkle
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