Distributed Ledger Immutability refers to the inherent property of a distributed ledger technology (DLT), such as a blockchain, where once a transaction or data record is added and validated, it cannot be altered, deleted, or reversed. This characteristic is fundamental to the security, trustworthiness, and auditability of crypto assets and their associated trading mechanisms.
Mechanism
Immutability is achieved through cryptographic hashing, where each new block of transactions contains a hash of the previous block, creating a chronological chain of linked data. Any attempt to modify an earlier transaction would change its unique cryptographic hash, consequently invalidating all subsequent hashes in the chain, which network participants would detect and reject. This cryptographic linkage secures the historical record against tampering.
Methodology
The principle of distributed ledger immutability forms the basis for auditability, transparency, and finality in crypto transactions, crucial for institutional adoption in areas like RFQ and options trading. It establishes a verifiable record of ownership and activity, reducing the reliance on intermediaries and enhancing confidence in data integrity. This streamlining reduces reconciliation efforts and operational risks across a decentralized ecosystem.
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