There is a common misconception that blockchain and distributed ledger technology (DLT) are the same. That’s not true! In reality, every blockchain is indeed a DLT, but not every DLT is a blockchain.
The best example is that of squares and rectangles. All the squares are rectangles, but not all rectangles are squares. This distinction is important to consider when making tech design and investment decisions. If the difference is misunderstood, then it becomes very costly to deal with.
This guide will explain what DLT is, how blockchain fits into and when each one should be used. With this new clarity, you will be better equipped to make wiser choices in the rapidly evolving world of distributed systems.
What Is Distributed Ledger Technology (DLT)?
Distributed Ledger Technology (DLT) is a method for recording and sharing data across multiple locations simultaneously, without a single point of control. Imagine that you have a shared spreadsheet that updates everywhere at the same time, protected by cryptography so that no one can cheat. All the participants hold a copy of the ledger. There must be a group agreement before any update can be made.
The breakthrough of DLT is that it removes the need for a central authority. Instead of only one server having the “master copy”, the ledger is actually spread across the network. This makes it highly resilient as well as transparent. The consensus mechanisms, whether it’s voting or proofs, keep all of the copies synchronized. It solves the challenge of trust in the distributed systems.
Unlike Blockchain, DLT does not have to use either blocks or chains. Some use DAGs, where the transactions are linked directly. Others use hash graphs or even distributed databases with the consensus layers. The designs depend on what is actually needed: scalability, privacy, or security. This flexibility makes DLT highly valuable for both the public and private systems, offering solutions beyond what blockchain alone can offer.
What Is Blockchain Technology?
Blockchain is a type of distributed ledger that stores data in blocks and links them together in a chronological chain. Each block holds transactions, a timestamp, and a cryptographic link to the previous block, making the block immutable. This design makes sure that the transaction history is clearly presented.
Blockchain was introduced to the world in 2009 by Bitcoin, and it proved that digital money could actually exist without the need of central control. Later on, Ethereum expanded on it with smart contracts, which are special programs that run directly on the blockchain. This unlocked use cases from supply chains to digital identity. There are consensus mechanisms such as Proof of Work or Proof of Stake to keep the network synchronized and secure. But they do impact the energy usage and transaction speed differently.
Interestingly, blockchain’s strengths also create challenges. The transparency is great for protection, but at the same time, it raises privacy concerns as the transactions are visible to all. The immutability means you can rely on it; however, if errors occur, they are permanent unless the network forks. Consensus can be a bit slow and requires a lot of resources. This definitely limits scalability.
How are Blockchain and DLT Different?
The relationship that exists between DLT and blockchain often confuses many. Still, the distinction becomes clear to understand when you take a look at their structures, capabilities, and optimal use cases.
Here’s a table outlining their comparisons.
| Aspect | Blockchain | DLT (Non-Blockchain) |
| Data Structure | Sequential blocks linked in a chain | Various: DAGs, hash graphs, or custom structures |
| Organization | Chronological, append-only chain | Flexible: parallel processing, multiple branches |
| Consensus Speed | Slower due to block confirmation times | Can be near-instantaneous |
| Scalability | Limited by block size and time | Potentially unlimited transactions per second |
| Energy Efficiency | Often high (especially PoW) | Generally more efficient |
| Privacy Options | Typically transparent/pseudonymous | Can offer complete privacy |
| Immutability | Extremely strong | Varies by implementation |
| Use Case Focus | Public, trustless environments | Often, enterprise, permissioned settings |
| Examples | Bitcoin, Ethereum | IOTA, Hedera, Corda |
The main difference lies in the structure and philosophy behind the two. Blockchain prioritizes total immutability and transparency because of its rigid chain structure. Each transaction is permanently recorded in a specific order. Moreover, the order cannot be altered later on. This means that blockchains are ideal for situations where public verifiability is needed, such as in the case of cryptocurrencies.
Meanwhile, non-blockchain DLTs put a priority on flexibility and efficiency. Without the restriction of sequential blocks, non-blockchain DLTs can process transactions in parallel. That means they can achieve finality faster and scale more easily as well. A DAG-based system like IOTA can confirm the transactions in seconds with minimal energy use. Permissioned DLTs like Corda can restrict the data visibility to relevant parties only. This is absolutely crucial for business confidentiality.
Examining the consensus mechanisms reveals several significant differences. While Blockchain usually uses competitive consensus where participants are competing to add the next block, DLTs actually use cooperative consensus where the nodes operate together to agree on state changes. This major difference affects key aspects, such as network dynamics and economic incentives.
The governance models also reflect the structural differences. The Blockchain networks focus on decentralization and are resistant to change. They require a broad consensus for any modifications. While the DLT systems, especially the permissioned ones, may have defined governance structures that allow faster adaptation and updates. This definitely makes DLTs more suitable for enterprises where agility is important.
When deciding between Blockchain and other DLTs, you shouldn’t focus on what’s better. Rather, you should look at your requirements and pick the technology that suits your needs the most. For instance, if public verifiability, immutability, and trustless operation are more important to you, then Blockchain is the ideal option. But if privacy, speed, and efficiency are your priority then you should opt for DLTs.
Use Cases of Blockchain and Distributed Ledger Technology
Both the blockchain and non-blockchain DLTs have found their unique niches, with each technology’s traits making it ideal for the different applications. Understanding the use cases for each technology helps clarify when to use which technology.
DLT Use Cases
1) Supply chain management
Non-blockchain DLTs definitely show their strength via controlled visibility and flexibility in supply chain management. There are companies such as Walmart and Maersk that use the systems to track the products from the origin to the consumer.
Suppliers can easily see their own part of the chain, and the regulators can easily verify the compliance data. Competitors are also kept from accessing the private and sensitive company data. Unlike the immutable blockchains, these ledgers enable the option for authorized corrections. This is critical in real-world operations where you cannot avoid errors.
2) Banking and Financial Services
Permissioned DLT platforms such as R3’s Corda support the quick and private interbank settlements. This showcases how DLTs are suitable for banking and financial services. The transactions that once took days to complete can now be finalized in mere seconds. Moreover, the sensitive data is available to only the relevant parties. The selective transparency ensures regulatory compliance. Meanwhile, the distributed design removes single points of failure.
3) Healthcare sector
The healthcare records also benefit from the non-blockchain DLTs. Providers can only access the patient information that concerns them. The patients retain control over permissions. Moreover, the updates synchronize instantly across the entire system. The ability to comply with “right to be forgotten” regulations makes this model more suitable than an immutable blockchain for sensitive medical data.
4) Digital identity management
Digital identity management follows the same principle as that of the healthcare sector. Instead of corporations that hold the personal data, the individuals themselves maintain their own information on a ledger. Individuals grant access only when necessary. Government agencies, banks, or other service providers can verify the credentials without the need to have permanent copies.
5) Trade finance
With DLT, letters of credit and trade documents are digitized. All the parties, from banks to customs officials, actually share a single source of truth. So, the smart contracts can automate the payments once conditions are met, lowering the number of processes overall.
Blockchain Use Cases
1) Cryptocurrencies
The most popular use case of blockchain technology is cryptocurrencies. Bitcoin actually proved that digital scarcity and peer-to-peer money can exist without centralized authority. The records that are immutable as well as transparent ensure that every unit can be traced. This also prevents double-spending and counterfeiting.
2) Decentralized Finance
Decentralized finance (DeFi) actually extends these principles. There are smart contracts on public blockchains that replicate the lending, trading, and derivatives without the need for intermediaries. The transparency enables anyone to verify the solvency. Meanwhile, immutability guarantees that the terms cannot be changed retroactively. This ultimately results in a financial system that is both trustless and open to all.
3) Non-fungible tokens (NFTs)
Non-fungible tokens (NFTs) also highlight blockchain’s ability to establish digital ownership. Basically, the record of creation and transfer cannot be changed. This allows for verifiable authenticity without any central authority.
4) Public records and voting
Blockchain has a tamper-resistant nature, meaning no one can alter it. Public records and voting definitely benefit from this feature. Land registries, electoral systems, and academic certification gain legitimacy via public verifiability. The citizens can audit the records, employers can verify degrees, and voters can confirm their ballots were counted.
5) Decentralized autonomous organizations (DAOs)
DAOs demonstrate what governance would look like if it were completely blockchain-based. The members can propose, vote, and manage the funds via smart contracts, with all the actions being visible to the public.
When to Choose Which Technology?
You need to do a careful analysis of your specific needs and requirements before you choose between blockchain and other DLT forms.
When choosing either Blockchain or DLT, here are things you need to consider.
Choose Blockchain When You Need:
● Complete transparency and public verifiability
● Absolute immutability with no possibility of edits
● Trustless operation without central authority
● Public participation and permissionless access
● Cryptocurrency or tokenization features
● Maximum censorship resistance
Choose Other DLT Forms When You Need:
● Privacy and data confidentiality
● High transaction throughput and speed
● Energy efficiency and low operational costs
● Regulatory compliance requiring data editing
● Known participants with defined roles
● Flexible governance and upgrade paths
Supply chains demonstrate why different systems are needed.
· Companies that are competing with each other may still share data, though need privacy.
· You need a lot of speed when tracking data in real-time
· When going green, you save energy
· Following laws may require fixing or deleting data.
That is why private blockchains (permissioned DLT) can sometimes work better than public ones.
Mixing both can help.
Some systems utilize public blockchains for transparency but maintain sensitive data in private. Others run on private DLT but connect to a public blockchain for added security. Using both smartly allows for the best of both worlds.
Know the trade-offs.
Public blockchains are hard to change, which stops cheating but also makes fixing mistakes tough. Private DLT is faster and cheaper but less decentralized. No system is perfect—it depends on what you need.
Plan for the future.
A private system might later need to go public, or a public one might need more privacy. Picking flexible options now saves money and problems later.
Some Examples of DLT Projects Beyond Blockchain
1) IOTA
IOTA uses a Directed Acyclic Graph (DAG) structure called the Tangle. It is designed for the Internet of Things (IoT). Instead of blocks, each transaction actually validates the two previous transactions, creating a web-like structure.
This enables feeless microtransactions, which are perfect for machine-to-machine payments. As more transactions are occurring, the network is actually becoming faster. This is the opposite of blockchain congestion. IOTA targets use cases such as smart cities, autonomous vehicles, and sensor networks where millions of devices need to transact with each other.
2) Hedera Hashgraph
Hedera Hashgraph actually employs a gossip protocol where the nodes randomly share information about transactions they know about. This creates a hashgraph, which is a record of who told what to whom and when.
The algorithm can help determine the transaction order without energy-intensive mining. Hedera achieves 10,000+ transactions per second with instant finality. Major corporations, such as Google and IBM, run nodes, providing high reliability for applications that require extremely high throughput.
3) R3 Corda
R3 Corda, built specifically for financial services, doesn’t maintain a global ledger at all. Instead, it shares data on a need-to-know basis between relevant parties.
This privacy-first approach makes Corda ideal for financial institutions that must protect competitive information while still benefiting from shared infrastructure.
4) Hyperledger Fabric
Hyperledger Fabric offers a modular architecture where organizations can plug in different components based on needs. Its channel feature allows the creation of private sub-networks within the larger network.
The different channels can have different rules, participants, and data. This flexibility makes Fabric popular for supply chains where different suppliers, manufacturers, and retailers need varying levels of access.
5) DAG-based Nano
DAG-based Nano focuses solely on cryptocurrency transfers with a unique block-lattice structure. Each account has its own blockchain, and transactions occur between chains asynchronously.
This allows for instant and feeless transactions with minimal energy use. While it is limited in functionality compared to the smart contract platforms, Nano still demonstrates how alternative structures can be enhanced for specific situations.
6) Holochain
Holochain takes a highly different approach with an agent-centric rather than data-centric architecture. Each user maintains their own chain, sharing and validating data with others as needed.
This creates a framework for truly distributed applications without global consensus requirements. Holochain targets social networks, collaboration tools, and other applications where individual sovereignty matters more than the global state.
Wrapping Things Up
The difference between blockchain and other distributed ledger technologies (DLTs) is not just technical. It shapes how entire digital systems work. Blockchain, with its chain of blocks and reliable immutability, is ideal for applications such as cryptocurrencies and decentralized applications because it provides transparency and trust. But blockchain also has limits. It can be slow, require a lot of energy, and is not ideal for privacy.
That is where other DLTs, such as DAGs, permissioned ledgers, and hash graphs, come in. They are more efficient, quicker, and more ideal for industries such as healthcare, supply chains, and finance.
The truth is, blockchain and DLTs aren’t actually competitors. In reality, they complement each other. Blockchain is best when public verification matters, while DLTs shine when privacy and speed are needed. In fact, future systems will likely blend both: blockchain as the secure anchor, with DLTs handling fast transactions.
The takeaway? Use the right tool for the right job. Don’t just stick to blockchain when another DLT is a better fit. And definitely don’t ignore blockchain, where its strengths are essential.
At Dypto Crypto, we break down blockchain, DLTs, and distributed systems to help you make smarter decisions, whether you’re exploring enterprise solutions or public crypto. Join our community to stay ahead in this fast-moving space.
FAQs (Frequently Asked Questions)
Q: Is DLT more scalable than blockchain?
Generally yes. Many non-blockchain DLTs, like IOTA or Hedera, process thousands of transactions per second since they don’t rely on sequential blocks or competitive consensus. DAG-based systems even speed up with more users. But this scalability often trades off decentralization or immutability. Permissioned DLTs limit validators for speed, and DAGs can have weaker finality. Blockchains are improving scalability with Layer 2 and sharding, but DLTs still hold a structural advantage in many cases.
Q: Can blockchain be used in private networks?
Yes. Private blockchains (e.g., Hyperledger, private Ethereum) restrict access to participants and validators, keeping the blockchain’s structure while adding controls. However, they lose benefits such as trustlessness and censorship resistance, making them more similar to distributed databases. In many cases, non-blockchain DLTs like Corda—built for privacy—may be better suited than retrofitting blockchain for private use.
Q: Are DAGs better than blockchains?
Not exactly—they serve different purposes. DAGs offer high speed, scalability, and efficiency, making them ideal for IoT and micropayments. Blockchains, however, provide stronger immutability, clearer ordering, and proven security (e.g., Bitcoin’s resilience). DAGs are newer with less-tested economics, while blockchains remain more battle-hardened. The choice depends on whether you value speed or security more.
Q: Is Ethereum a blockchain or DLT?
Both. All blockchains are DLTs, but not all DLTs are blockchains. Ethereum specifically uses blockchain architecture—sequential, cryptographically linked blocks in a public, permissionless network. So Ethereum is a blockchain, and by definition, also a DLT.
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