Central Ledger in Blockchain: Record Keeping Redefined
Central Ledger is a physical ledger or computer file used to centrally record transactions.
What is Central Ledger?
Central ledgers are physical books or digital files used by individuals or organizations to centrally record and summarize economic transactions – as opposed to decentralized ledgers used in distributed ledger technology (DLT).
Ledgers have been used since ancient times to record and confirm the ownership of assets and the legal status of people, as well as their legal status and political rights.
The spread of double-entry bookkeeping in sixteenth-century Italy revolutionized the use of ledgers in banking and accounting, which some experts believe played a crucial role in the expansion of the capitalist economic system. The technique of recording each entry in an account, along with the corresponding and counter entry in another account, greatly improved the accuracy of accounting entries.
Traditionally, a company’s accounting department kept a centralized ledger to record all economic activity in which the company participated for the purpose of financial analysis, tax reporting, etc. For all its effectiveness, this approach has its drawbacks: relying on a central authority to manage all accounting operations makes the ledger vulnerable to any errors made by that authority, both deliberate and accidental.
Bitcoin (BTC) blockchain is one of the most successful examples of a decentralized ledger.