Immutable Ledger

What is an immutable ledger?

An immutable ledger is a digital system that records transactions or data entries to prevent alteration or deletion. They’re based on the concept of blockchain, where data is nearly safe and secure from corruption. It records each transaction with a timestamp and links it to the previous one, forming a chain of blocks. 

Immutable ledgers provide IT professionals with tools to enhance security, ensure data integrity, innovate, and improve operational efficiencies. These benefits are increasingly important in a digital world where data security and transparency are paramount.

Many blockchain platforms use an immutable ledger to record data and transactions to prevent modification and maintain security. 

How does an immutable ledger work?

An immutable ledger relies on a consensus mechanism. When a new transaction occurs, the underlying technology adds it to a new block. The block generates a hash value, a string of alphanumeric characters. Every block on the chain contains its hash value and the previous block's hash value. 

Every new hash contains the meta-data of the last block, creating a link between blocks. These blocks cannot be altered or deleted because if anyone attempts to modify them, the subsequent block rejects it, as the hash won’t remain valid after modification. 

Immutable ledger types

There are several immutable ledgers, like public or private and permissioned or permissionless. If businesses need complete decentralization, they need ledgers to be public permissionless networks. The types of immutable ledgers are:

• Public / Permissioned: These show no decentralization. The operating application and the network nodes need to be invited to join in, require a particular set of criteria, or show a form of verification.
• Private / Permissionless: These need the applications in production to be asked to join the network. Moreover, they can be removed without any warning at any given moment. The nodes that constitute the network and operate said requests can freely and secretly join and contribute.
• Public / Permissioned: These let requests be deployed in production or withdrawn without notifying anyone, showcasing their identity, or fulfilling application needs. The nodes that run applications and constitute the network must be requested to enter the network.
• Public / Permissionless: This is the most decentralized network. Applications must be deployed while in production or withdrawn without notifying anyone, disclosing identity, or needing to fulfill application criteria.

Immutable ledger benefits

There are several benefits other than the immutable ledgers’ security and traceability, including:

• International accessibility: These ledgers function through a distributed network, making them easily accessible from anywhere.

• Data integrity: The ledgers keep data secure and prevent any alteration, maintaining data integrity. 
• Cost reduction: Immutable ledgers remove the need for centralized intermediaries and central authorities to validate and reconcile data. This reduces the costs a business incurs.
• Transparency and trust: People in the network can easily view these ledgers. They’re transparent and build trust among stakeholders and users.
• Innovative: Immutable ledgers allow the formation of new business models by leveraging smart contracts.
• Resilience: With the help of decentralized architecture, the ledgers have strength and resilience against downtime.

Immutable ledger features

Immutable ledger is the underlying technology behind cryptocurrencies. It prevents people or systems from altering or tampering with data. Several features play a crucial role in achieving this security. These features include: 

• Devolution: Blockchain is interconnected with several immutable ledgers and is decentralized. It means that the ledger copies are spread across a network of nodes. Moreover, each node has a ledger copy with them.
• Immutability: Every detail regarding a transaction or record is linked to the older one, creating a series of blocks that make it hard to alter the history of information.
• Smart contracts: Some immutable ledgers assist in implementing smart contracts. These smart contracts will self-execute with the terms in the arrangement written directly into the code.
• Auditability: Auditing is simple due to the transparent nature of ledgers. A third party or participant can check the transaction flow while inducing trust and accountability.

Immutable ledger vs. centralized ledger

An immutable ledger doesn’t allow data alteration or deletion to ensure data integrity. Any single entity doesn’t control it, providing security benefits as there’s no central failure point. 

Conversely, a centralized ledger is a record-keeping system where a single entity stores and controls the data. The central authority can alter, add, or delete records. Since the authority can modify data, it is prone to manipulation, potentially leading to user trust issues. These ledgers are more efficient in processing speed as they don’t require the complex consensus mechanisms of decentralized systems. Organizations can scale them quickly. 

Learn more about blockchain and understand how it elevates data integrity.