Guide on the basic principles of DLT

This article embraces the functional aspect of DLT’s meaning. Each passage displays numerous statements, principles, and facts dedicated to how the DLT model works. The main goal of this article is to uncover all the advantages and disadvantages of distributed ledgers’ structure. 

Distributed ledgers’ structure (DLT) consists of several basic components displayed through specific layers. 

DLT characteristics: 

1. No amends= transactions aren’t replaced and the full history of transactions is saved and fixed;
2. Security of database= ledgers in DLT is not altered or corrupted;
3. Circulation of nodes= there are always new nodes to be created, that predict the attacking cases;
4. Sharing of ledgers= sharing of ledgers in between interconnected nodes;

The key issues that are going to be disclosed on the practical side of DLT in this article are:

-Participating Nodes

-Agreement mechanism (Consensus)

-Approvers (Validators)

-Types of communication in DLT

If you are in need of one DLT project, the development  of DTL is better to delegate to expert blockchain developers.

1. Types of communication.

There are only two types of communication that have their specific features. 

1. Peer-to-peer communication. This type can be characterized as a straight form of connection without any mediators. The Peer-to-peer type has some pros and cons. 

• Pros: high speed+ possibility of sharing personal data.
• Cons: too much personal data demanded (one’s phone number\ IP Address, etc.), which is not secure, so the risk of being hacked increases.

1. Epidemic protocol. This is not just a play of words if it comes to the title. But the name speaks for itself. Though it is based on peer-to-peer communication, the connection is released through a fixed number of neighbors.

-Pros: high speed+ no need to share personal data like address, etc.

-Cons: at the same time, it is impossible to share personal data.

1. Nodes

Nodes are some sort of hubs that contain and share ledgers and substitute 3rd person and trusted central system. Nodes are essential in making DLT more contemporary and digitally adapted for transactions. 

1. Consensus.

Consensus is a kind of mechanism that can also be called consent. Or it can also be called an agreement mechanism authorizing procedures carried out. This form of instrument exists to reach unity in contradictory statements, to define a triumphant message from all the announcements in contradiction. This specifical DLT function coincides with the connection between validators, nodes, and the types of communication and consensus, that make it work as coherent parts of one united system.

3.1 Types of Consensus:

• Classical consensus;
• Nakamoto consensus;

Generally, these types are the opposite. The main differences are in the types of communication (Peer-to-peer communication; Epidemic protocol) that we’ve established previously + the number of approvers (validators). 

We will look at these two kinds of consensus by considering such perspectives as opinion in consideration and mechanism of voting. Thus, these two perspectives comprise the whole model of DLT processing and give us a definite review of Classical and Nakamoto agreement mechanisms from the angles of different measures, disclosing the usable side of each type directly. These are: 

1. Finality (determined or probable)
2. Time-lapse (slow or fast)
3. Amount of nodes\validators (a few\ unlimited\ fixed amount)
4. Security (reliable and secure\ predisposed to get attacked)
5. Level of freedom (total consensus\ approximate consensus)

3.2 Consensus types in comparison:

• Classical type (corresponds to peer-to-peer communication in the mechanism of voting + all validators’ opinion is taken into consideration usually):

1. Classical type refers to decisiveness which is determined. It means that there is no chance for the recession in a systematic process.

2) Classical type system serves in a fast way.

3) Amount of nodes\ validators: a few dozen (limited).

4) Unfortunately, there is a problem hidden on this side of the Classical type. A few validators reveal themselves by sharing an IP address. They can easily get attacked on the internet. 

5) As the opinion of all validators is counted, it is hard to come to an agreement and total consensus (approximate).

• Nakamoto type (corresponds to Epidemic protocol communication in the mechanism of voting+ only one validator’s opinion is taken into consideration frequently):

1. Classical type refers to decisiveness that is not determined but probable. It means that things will never get their point of finality though it is difficult to revert things.

2) Classical type system serves slower than Classical type since there is only one validator.

3) Amount of nodes\ validators: typically only one validator in this type.

4) Great amount of validators can afford to use a covering of the IP with the help of Epidemic protocol, which is safe. 

5) Reliable and secure.

1. Conclusion

Many benefits, such as considered opinion of each validator and mechanism of voting + secure database, make DLT more reliable and transparent. 

DLT is a logical chain comprised of 5 measures, two types of communication, and some necessary properties. All the characteristics are put on the surface, creating the image of flexibility and a prudent approach to contained and shared data.