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Immutable ledger

Immutable ledger definition

An immutable ledger is a record-keeping system where the data entered can’t be altered, tampered with, or deleted. It ensures that all transactions or entries made in the ledger are permanently recorded and maintained in their original state, creating a transparent and trustworthy record of events. Immutable ledgers are used in finance, supply chain management, and digital currencies. One well-known example of an immutable ledger is blockchain.

See also: blockchain technology, node

How an immutable ledger works

  • Participants initiate transactions (e.g., financial or digital asset trading).
  • Transactions are sent to network nodes (i.e., computers) that authenticate them through rules and cryptographic methods.
  • Validated transactions are grouped into blocks before being accepted onto the ledger.
  • Various network consensus mechanisms (like Proof of Work, Proof of Stake, or Delegated Proof of Stake) agree on valid transactions and their order.
  • Verified blocks generate unique cryptographic hashes, linking them in an unalterable chain.
  • The previous block's hash is included, creating an unbreakable link. Altering one block requires changing all subsequent ones due to hash functions and consensus.
  • The network is decentralized, with no central control, enhancing security and resilience.
  • The ledger is replicated across all nodes, ensuring even data availability and ledger integrity.
  • Blockchain's transparency allows anyone to audit and verify transactions — making it more accountable.

Immutable ledger benefits

  • Once entered, the data can’t be changed or deleted.
  • The ledger is open for anyone to see, reducing the possibility of data manipulation.
  • The cryptographic techniques enhance security.
  • Decentralization makes the system more resilient against attacks and failures.
  • Automated verification reduces the need for intermediaries.
  • The transparency of the ledger makes it difficult to commit fraud.