DLT Advantages and Benefits of Distributed Ledger Technology

DLT advantages and benefits

Distributed Ledger Technology, or DLT in short, is like a special digital notebook used in many industries, including finance. It became popular after Bitcoin in 2009 showed how safe and big it can be. It can make recording and sharing information clear, fast, and trustworthy.

In this article, we’ll explain all DLT advantages and the many benefits of using distributed ledger technology. Unlike other systems, it isn’t owned by one person or company. Instead, many people share it. This can make things fairer, and more transparent, and help businesses trust each other more, work faster, and come up with new ideas.

However, it is not perfect. We’ll discuss its challenges and where we might see it in the future.

Introducing DLT (Distributed Ledger Technology) and Blockchain

DLT, short for Distributed Ledger Technology, is like a shared online diary. Instead of one person controlling it, everyone can see and add to it. This means people can trust it more since everyone checks what gets written. Find out in detail “What is DLT technology” in our previous blog post.

One neat feature of DLT is “smart contracts.” They’re like automatic deals between friends. For example, if two friends agree to swap toys, the smart contract makes sure they both do it. The ability to create these kinds of digital contracts pushed the amount of DLT uses to a completely new level.

dlt basics simply explained

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Have you heard of Cryptocurrencies or Bitcoin? It started in 2009 and uses a special tech called ‘blockchain’. It’s a type of DLT. Think of blockchain as a digital notebook everyone can see and add to, but nobody can change what’s already there. This makes it safe from hackers.

There’s also something called “DAG.” It’s just a different way to keep things organized in this diary. This isn’t just about money. Hospitals, shops, and even gadgets we use daily can benefit. It can make things faster and more trustable. Companies can keep track of stuff faster and without needing someone in the middle, making things run smoother.

This tech is like a new magic tool for the online world. This is the reason why so many businesses are implementing distributed ledger technology. But there’s so much more DLT advantages to discover!

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Why is DLT Gaining Attention?

DLT is like a new way of keeping records that many people are talking about. It’s special because it’s safe and not controlled by just one group. It helps things run smoothly and can save money. Everyone can see what’s happening, which makes it trusted and efficient.

Advantages of Distributed Ledger Technology

advantages of distributed ledger technology

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DLT is like a shared digital notebook where people can keep track of their stuff in a clear and safe way. Instead of having one person or group in charge, everyone shares control. This means it’s harder for one person to mess things up or cheat.

Because there’s no middleman, things get done faster and it’s cheaper. Data, or information, can be safely kept and looked at from different locations. DLT is also great for keeping records that are easy to check, which is super helpful for places like banks. With all its cool features, DLT advantages helping businesses change for the better.

DLT Advantages Compared to Traditional Systems

DLT advantages are manyfold compared to traditional systems. One key advantage is its enhanced security. This technology uses cryptographic techniques to secure transactions and data, making it extremely difficult for hackers to manipulate or tamper with the information stored on the ledger. In times when cybercrime is on the rise, the security of IT systems and the protection of data should be at the top of everyone’s list of priorities.

Let’s dive into the many advantages of Distributed Ledger Technology:

1. Decentralization

dlt advantage decentralization

Distributed Ledger Technology is a new way of sharing and recording information. Imagine a big online notebook that many people use at the same time, but no one person is in charge of it. That’s what DLT is like!

Instead of one person or company controlling everything, DLT lets everyone work together. This means there’s no need for a middleman, like a bank, to check if everything is okay. Because it’s shared among many, it’s hard for hackers to mess with it. A decentralized ledger makes it safe and trustworthy.

2. Transparency

dlt advantage transparency

DLT is like a digital notebook that everyone can see and use at the same time. Everyone can see what’s written in it, which makes it hard for anyone to cheat. This makes people trust it more. It also lets people see changes or trades as they happen.

There’s a special kind of DLT called Hyperledger Fabric that uses something called a data structure, with blocks of data, to show info even more clearly. One cool thing about it is that we don’t need a middleman, like a bank, to check things for us. Everyone can see and agree on what’s happening directly. Because of this transparency, everyone can trust DLT data.

3. Security

dlt advantage security

DLT is like a super-safe digital notebook. Once you write something in it, no one can erase or change it. This keeps the information safe from bad people who might want to mess with it.

It’s different from other diaries because many people can have copies of it, so if one gets lost or ruined, the information isn’t gone. We avoid the risk of a single point of failure. Because of the way it is set up, it’s really hard for hackers to mess with.

There’s also a special version of DLT called DAG. With DAG, there’s no need for people to check and double-check the information. This makes it even safer. It can even improve security for patient data in healthcare.

4. Reduced Costs

dlt advantage reduced costs

DLT helps businesses save money in many ways, including achieving cost savings through getting rid of the middlemen, which means things can get done cheaper and faster. Because of DLT, businesses don’t need as much paperwork, and things get done automatically. This makes everything faster and saves money. Plus, there’s less chance for people to cheat or make fake stuff because everything is checked and double-checked. And because everything is clear and open, businesses can work better and faster, resulting in significant cost savings.

Additionally, since Distributed Ledger Technology stores all data on a single ledger instead of multiple databases, businesses can save money on storage and maintenance fees, contributing to their digital transformation. By greatly reducing paperwork and errors, DLT significantly reduces overhead and transaction costs and reduces or eliminates the need for third parties or middlemen to verify transactions.

5. Immutability

dlt advantage immutability

Once you write something in a distributed ledger, you can’t erase or change it. This makes sure that the information is safe and nobody can mess with it. Why is this cool? Because it’s like having a secret code that protects your data. Even hackers have a tough time trying to change anything. This means that banks, businesses, and other places can trust that the information they save using DLT is super safe.

6. Real-Time Processing

dlt advantage real-time processing

DLT, or Distributed Ledger Technology, helps computers share information in real-time. Distributed ledgers use independent nodes to record, share, and synchronize transactions, including new transactions, in their respective electronic ledgers instead of keeping them in one centralized server.

In order to ensure the security and accuracy of these transactions, every computer node of the network needs to verify and validate data points. This verification process eliminates the need for an intermediary to check the transactions, making the system more efficient and reliable. This fast processing is really useful for things like paying with your credit card or transferring money. Instead of waiting for a bank to check everything, DLT does it right away.

7. Elimination of Intermediaries

dlt advantage elimination of intermediaries

DLT lets people exchange things directly with each other without needing someone in the middle. These “smart contracts” do save time and money. Think of it like two friends trading toys without needing a teacher to check if it’s fair. It makes this process open and honest, so everyone knows what’s happening. Instead of having one big boss in charge, DLT spreads out the control, making things simpler. With this technology, people can make deals directly, making everything quicker, safer, and cheaper.

8. Programmability

dlt advantage programmability

DLT platforms, like Ethereum, let people set up automations, and include ML (machine learning) or “smart contracts.” Think of these as computer programs that run by themselves when certain conditions are met. For example, if you agree to pay someone when they finish a job, the smart contract will automatically do it for you once the job is done. This means less manual work and fewer mistakes.

9. Resilience and Reliability

dlt advantage resilience and reliability

DLT provides greater resilience and reliability as it operates on a decentralized network, ensuring that even if one node fails, the system remains operational.

So, distributed ledger technology helps companies work faster, save money, and come up with cool digital ideas. In short, DLT’s ability to set up these automatic rules and achieve automation is a big reason why it’s so useful. Once pre-specified conditions are met, the next step in the transaction or process is automatically triggered.

Benefits of Distributed Ledger Technology

benefits of distributed ledger technology

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Distributed Ledger Technology offers numerous benefits across various industries. Before we talked about DLTs’ key advantages. Now we’ll have a look at the benefits of using a decentralized network of computers to record, verify, and store transactions, making it difficult for any single entity to manipulate or tamper with the data.

DLT Benefits for New Business Opportunities

DLT offers many benefits. Using it is like giving businesses a super tool. It helps build trust, save money, work faster, be more secure, and think of new ideas. That’s why many businesses are excited about it and think it’s important for their future. Because it allows for new ways of doing things, businesses can come up with cool new ideas or services. It’s like discovering you can use a toy in a brand new way you hadn’t thought of before.

Here are the 10 benefits of distributed ledger technology to create new business opportunities:

1. Trust

dlt benefit trust

DLT is a way of keeping records that makes it easy for everyone to see and trust them. Think of it like a shared notebook, everyone gets a copy of the ledger, where everyone writes down what they do, and once something is written, it can’t be erased or changed. This makes it hard for anyone to cheat or lie. Cryptography, which is like a secret code, keeps the information safe.

Instead of having one person or company in charge, everyone using DLT can check and agree on what’s written. This means that you don’t have to rely on just one person, to be honest; everyone is watching and checking. It’s like a group project where everyone makes sure things are done right. Because of this, distributed ledgers give people more control and trust in the digital world.

2. Efficiency

dlt benefit efficiency

DLT makes things work faster and better. Think of it like a super-fast computer system. Instead of having one main computer in charge, distributed ledgers have many computers working together. This means no more waiting for one person or group to check and approve things because all the computers can do it at once.

For companies, DLT can save a lot of time and effort in supply chain management. It can help them be more modern and come up with new ideas. Distributed ledger technology can streamline processes by removing intermediaries and automating transactions through smart contracts.

3. Access and Inclusion

dlt benefit access and inclusion

Thanks to DLT, people who don’t have regular bank accounts can still use money and do business online. This is really helpful for people in places where banks are hard to reach or use. It lets people share and send money directly to each other without needing a middleman, like a bank. It also makes sure that all the information is safe and honest because everyone can see it.

There is a special way this technology can keep information and it’s called DAG. It makes sure everything is stored safely. And because we don’t need middlemen, things are faster and simpler. This helps more people join the digital world and is a big step forward for technology.

4. Auditability

dlt benefit auditability

DLT lets people track and record things in a way that’s open and hard to cheat. Think of it as a group project where everyone writes down what they did, and everyone else checks it. This means when someone wants to see if everything’s correct, an auditor, can easily look at this notebook.

It’s super secure because it uses secret codes to protect the information. This makes it hard for bad people to trick or lie. DLT helps make sure everything is honest and right, especially with money matters. It’s like a faster and safer way to check work without needing a middleman.

5. Reduced Fraud

dlt benefit reduced fraud

DLT makes it hard for people to cheat or do sneaky things. It uses special tools and rules to make sure that what’s written in the digital ledger is safe and can’t be changed easily. Because of this, there’s less chance for bad people to do tricks or scams when using distributed ledger technology.

One of the biggest DLT advantages is its decentralization. Instead of relying on one single authority to manage and store data, it’s distributed across multiple nodes, making it virtually impossible for a single entity to control or manipulate the data. This transparency eliminates the chance of fraudulent activities, such as manipulation, occurring in the ledger. As such, distributed ledgers remove the need for entities using the ledger to rely on a trusted central authority that controls the ledger or an outside, third-party provider to perform that role and act as a check against manipulation.

6. Innovation

dlt benefit innovation

Distributed Ledger Technology stands for innovation that drives all types of businesses. It is like a new way of keeping records that’s getting a lot of attention lately. This method saves time and money. Plus, it’s hard for hackers to mess with, and gives people more control over their own stuff, including their personal information.

This cool tech can change the way we do things in areas like money, health, and shipping. It’s like a new digital tool that could make things better and safer for everyone, especially in terms of data accuracy and security by reducing the involvement of unnecessary third parties in transactions.

7. Cross-Border Transactions

dlt benefit cross-boarder transactions

With distributed ledgers, we don’t need a middleman for financial transactions, which cuts down costs and makes things faster. It’s like having a secure, see-through wallet where everyone can see the money move but can’t mess with it. This means there’s less chance for mistakes or cheating.

Instead of waiting days, money can move in just minutes. Plus, people in faraway places can join in, even if they don’t have regular banks nearby. And the best part? Once something is added to this ledger, it can’t be changed or faked. This makes using DLT for sending money across countries super useful, helping people, businesses, and even far-off places join in the world’s big money circle. Banks and the whole financial industry became early innovators in distributed ledger technology.

8. Supply Chain Traceability and Provenance

dlt benefit supply chain tracability and provenance

One of the benefits of using distributed ledger technology is traceability, which offers complete decentralized traceability of assets, from their creation to their current ownership. This improves accountability and reduces the risks of fraud and theft. Additionally, the inherent risk of non-reversible transactions and the possibility of a 51% attack are also disadvantages associated with distributed ledger technology.

When businesses use this technology, they can easily see where things come from and how they were made, which is a huge benefit of DLT. This helps make sure everything is done the right way. Unlike traditional databases, distributed ledgers have no central data store or administration functionality. With the rise of distributed ledger technology, businesses are now exploring new processes and business models enabled by this technology and we reduce inefficiencies.

Furthermore, blockchain technology creates an audit trail that documents the provenance of an asset at every step of its journey. This audit trail is particularly beneficial in industries concerned about environmental or human rights issues surrounding a product, as well as those troubled by counterfeiting and fraud. The audit trail helps provide the necessary proof to address these concerns effectively.

9. Enhanced Collaboration

dlt benefit enhanced collaboration

DLT lets people work together without needing someone in the middle, like a bank. This has not only enhanced collaboration, it also made things faster, safer, and cheaper. On top, you can even create a thing called DAO (decentralized autonomous organization) which is the highest level of collaboration you can reach.

Because of DLT, when you do something like buying or selling, everyone can see it, so it’s very clear and honest. This is really helpful in businesses like stores, hospitals, and moving goods because they can see everything that’s happening right away and make better choices. It can help many areas work better and come up with new ideas. By using DLT, companies can do things in a new and improved way.

10. Customization

dlt benefit customization

Customization in DLT is like being given a box of LEGO bricks and being told you can build whatever you want. It gives you the power to create something perfect for your needs, making it safer, more flexible, and more efficient. Plus, it’s just cool to have something that feels like it was made just for you!

This cool technology can change how many industries, like hospitals or house selling, do their work. The best part of all these DLT advantages, it gives people more control and can save them money.

Disadvantages and Challenges in Implementing DLT

DLT disadvantages and challenges

When we talk about a new tech thing called Distributed Ledger Technology, we’re talking about a way to keep and share records safely. But using DLT is not always easy, and there are some problems we need to fix.

  1. Energy Consumption: As more and more people use DLT, it needs more computer power, which means using more energy. This could slow things down and is not great for the environment. Especially, if we use proof of work as a consensus mechanism, we do use a significant amount of energy as miners are involved.
  2. Scalability: A crucial aspect of decentralized systems is scalability, especially as the number of participants and transactions increases. Traditional blockchain networks often face scalability issues in terms of transaction throughput and confirmation times. However, advancements in technology and the exploration of alternative consensus mechanisms, such as Directed Acyclic Graph (DAG), are addressing these scalability challenges.
  3. Talking to Each Other: There are different kinds of DLT, like blockchain and something called DAG. We need to make sure they can work together and share information easily.
  4. Learning About DLT: A lot of people don’t know much about DLT. So, we need to teach them about it, especially if we want banks and other groups to use it.
  5. Rules and Laws: Since DLT works on the internet, we need to have rules to keep data safe, and private, and follow the law.
  6. Working Together: The best way to fix these problems is for everyone interested in DLT to work together. They can make rules that everyone agrees on and help each other out.

In short, DLT has a lot of promise, but we need to work on these challenges to make it really helpful for everyone.

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What does the Future Hold for DLT?

DLT advantages are shining out. It’s like a new tool that could change how things work in areas like money, health, and how we get things from one place to another. It helps make things faster and gets rid of the need for middlemen. As more people work together on it, it gets better and can do even more things.


To wrap up, the advantages of Distributed Ledger Technology are manyfold. And so are the benefits of DLT. is changing many businesses. This technology helps by making things more open, safe, and fast. It also stops bad actions, like stealing, and brings new ideas to life.

Even though it might be tough to start using all DLT advantages, the future looks bright. It’s going to help many areas of business. So, it’s a good idea to learn about and use it because it can do a lot of good things. Get started too! Call us today, we can teach your team and implement distributed ledger technology for you, to innovate your business.

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Do Cryptocurrencies use DLT or Blockchain?

Cryptocurrencies use blockchain, which is a type of DLT. Think of it like this: all squares are rectangles, but not all rectangles are squares. Similarly, all blockchains are DLTs, but not all DLTs are blockchains. DLT advantages are manyfold for creating currencies.

How will DLT impact accounting, auditing & finance?

DLT advantages are manyfold, and will make accounting, auditing, and finance more transparent, faster, and trustworthy. It can help reduce errors, make checks easier, and offer a clearer view of money transactions.

What is the value of distributed ledger technology?

DLT, or Distributed Ledger Technology, is like a digital notebook shared by many people. It can make transactions safer, more open, and faster. DLT advantages changing how industries, especially finance, work.

What are the problems with distributed ledger technology?

DLT, or distributed ledger technology, can be complicated to understand and set up. Also, not everyone agrees on how to use it, and it can sometimes be slow for certain tasks.

What are the DLT Blockchain Benefits for Healthcare?

DLT, or blockchain, can make healthcare better by safely storing patient records, making sure data isn’t changed wrongly, and helping doctors share information quickly and securely. DLT advantages make healthcare more trustworthy and efficient.

What is Scalability in DLT?

Scalability in DLT means how well the system can handle more users and transactions without slowing down. Think of it like a road: the wider it is, the more cars can drive on it without traffic jams.

Marcel Isler

Marcel Isler

Marcel is a Business Economist and founder of iMi Blockchain. A Consultant and international Keynote Speaker. He studied at the University of Oxford. He helps enterprises to implement Blockchain applications. On our blog, he writes about distributed ledger technology, smart contracts, cryptocurrencies, industry news, and future trends.