Distributed Ledger Technologies

A distributed ledger is a database shared by multiple participants in which each participant maintains and updates a synchronized copy of the data. Distributed ledgers allow members to securely verify, execute, and record their own transactions without relying on an intermediary, such as a bank, broker, or auditor.

Smart contracts are digital contracts that define the terms of a transaction via computer code. They also verify, execute, and enforce that transaction without the need for a third-party intermediary.

Decentralized applications (dapps) are built using blockchain or distributed ledger technologies. Dapps allow users to transparently complete transactions, verify claims, and collaborate without needing to trust a centralized intermediary.

If you are learning about web3, cryptocurrency, or blockchain the chances are that you have heard different projects referred to as being a layer 1 or a layer 2 project. This post will explain the differences between layer one and layer two networks and provide examples of both.