A cryptocurrency ledger is a record-keeping system for decentralized digital currencies, such as Bitcoin and other crypto assets. This public ledger secures the identities of users mostly anonymously, maintains their balances of crypto assets, and records all the transactions among network participants.
In the crypto ecosystem, the blockchain is essentially the digital ledger and public record of transactions that is replicated and distributed across the participating network of computers.
It is recorded through a decentralized network of computers globally without a central administrator or bookkeeper. The peer-to-peer network duplicates and saves a copy of the digital ledger and updates it as new transactions occur, without a central authority. It is the backbone of the blockchain system that allows cryptocurrencies such as Bitcoin to function. The digital ledger is made up of blocks that are used to record transactions of crypto assets across many computers, in a way that the block cannot be altered later without changing all the other subsequent blocks.
Let’s look at an example! If you make a transfer through a bank, the details of the transaction will be entered into the bank’s records. The bank’s accounting system ensures the record of balances on both sides of the transfer. The bank’s records, however, are accessible to bank officials as well as authorities like the government or tax officials. By contrast, on a cryptocurrency ledger, the blockchain - which contains details of the transaction - cannot be accessed by a central authority. The information on the transaction is held not with one institution such as a bank but with a network of computers working in a synchronized manner.
The concept does have its downsides, though. There are concerns about how to maintain such a long-running history of transactions of crypto assets while keeping the system up and running at the same time. There are also questions over whether a system that records every single transaction - however well encrypted - is exposing network participants to tracking by governments, security services or hackers. This is not necessarily a bad thing, though. In May 2021, Colonial Pipeline, the largest pipeline system for refined oil products in the US, suffered a ransomware attack, but the US government was later able to track down the Bitcoins and recover some of the ransom from the hackers.