While often used interchangeably, a blockchain and a distributed ledger are distinct – though subtly different – technologies.

A distributed ledger is a record of consensus with a cryptographic audit trail which is maintained and validated by several separate nodes*. This cryptographically assured and synchronized data can be spread across multiple institutions. Distributed ledgers can be either decentralized, granting equal rights within the protocol to all participants or centralized, designating certain users particular rights. Actors typically employ distributed ledgers when they need a tool which permits the concurrent editing of a shared state while maintaining its unicity. The ledger’s state is determined through a consensus algorithm, which can vary in its mechanics but ultimately serves to validate information from inputs to the network.

Often described as the technology that underpins the Bitcoin network, a blockchain data structure has a shared, replicated ledger comprised of digitally recorded and unchangeable data in packages called blocks. A blockchain sits below a distributed ledger and acts as a way to order and validate the transactions in the ledger. While a blockchain automatically produces a new “block” after certain predetermined criteria is met, a distributed ledger only verifies a transaction once it is submitted, as opposed to pushing out empty blocks. A blockchain is a way to implement a distributed ledger, but not all distributed ledgers necessarily employ blockchains.

*In a distributed ledger, it is not necessarily the case that all nodes either receive all the information or, if they do, can understand it. In the Ethereum model, for example, all nodes receive and understand all the information. In Corda, only the nodes involved are aware that a transaction exists.