As the name suggests, Distributed Ledger Technology (DLT) refers to a category of digital systems that comprise a database for recording and managing assets, in which the transactions are recorded in multiple locations.
A blockchain is a kind of DLT specifically relying on the consolidation of transactions into blocks of data for the purposes of validation and incorporation into the ledger, a copy of which is then stored by every node in the network. The most famous blockchain protocol is that which underpins the Bitcoin cryptocurrency, which is a public, permissionless protocol. The Stratis mainchain is based on a fork of the Bitcoin code and, like Bitcoin, runs a public, permissionless protocol. Being public and permissionless makes these blockchain protocols extremely transparent and secure, however, Stratis understands that in order to extract commercial value from a blockchain solution, businesses both large and small may require a different kind of ledger which:
- Runs on a private network, for example, due to the confidential nature of the data which needs storing, where allowing anyone to view it is not acceptable.
- Is permissioned, even though access is already restricted because the protocol is hosted on a private network, further restrictions need to be in place covering who can read and write specific data.
- Has the ability to store and track information other than the ownership of a cryptographic token, including the related transactions.
- Does not have a cryptocurrency asset associated with it. The motivation to update the ledger comes from a shared sense of cooperation.
The kind of ledger that is implemented depends on a trade-off between performance, resilience and privacy. Public, permissionless blockchains are highly resilient, but are resource-intensive to operate, which can affect performance. By recognising that in some circumstances (for example, inside a single business, or perhaps within a consortium of similar organisations), a level of privacy is desirable, and the complete distribution of control offered by a public, permissionless blockchain is not necessary, so can be traded off in favour of higher performance where this is needed. The Stratis DLT Solution is such a system, giving you the flexibility to establish the trade-off between performance, resilience and privacy that your use case requires.
A feature of the Stratis DLT Solution is the ability to control who has access. In order to assign access rights, participants need to be identified in the Stratis DLT Solution. This is a key difference with the Stratis public mainchain, where participants are pseudo-anonymous and anyone who runs a node can become a participant.
The Stratis DLT Solution allows players within an industry to capture and share value in a way that is secure to everyone. Where previously, issues of trust stopped organizations collaborating even on a private network, DLT provides an opportunity to take another look at how an industry could work better together. Blockchains don’t eliminate the need for trust. However, they do distribute the trust among the different actors in a system and minimise the amount of trust placed in any single actor. In a public blockchain, this protocol is tested to an ‘extreme’ when participants allow other anonymous participants to update the blockchain with their transactions.
Private blockchains are the same as a public blockchain in that consensus on a data update still needs to be reached across all participants who have access to it; in this sense the decentralization inherently necessary in public blockchains is carried over to the private, permissioned model. Ultimately, when used in a DLT solution, blockchain’s core ideas are still being used to overcome the need for a single entity to be in charge of managing, storing, and funding a database.
Blockchains track assets. On the Stratis blockchain, ownership of the STRAX token is tracked. Most public blockchains, including the Bitcoin blockchain, follow a similar model and the only assets tracked are some kind of token.
There are 100 million indivisible units of value in each STRAX, and the only asset tracked on the Stratis blockchain represents an amount of these units. If a participant on the Stratis blockchain has 1 STRAX, it means that they own an asset comprising 100 million of these indivisible units. When a transaction occurs on the Stratis blockchain:
- Existing STRAX asset/s belonging to the sending participant are spent (archived).
- New STRAX assets are created for the receiving participant/s.
- If applicable, STRAX assets are created to pay change to the sending participant. For example, a participant has two 5 STRAX assets and they need to send 8 STRAX. In the subsequent transaction, the two 5 STRAX assets are spent, an 8 STRAX asset is created for the receiver, and a 2 STRAX asset is paid as change to the sender. The sender now has one asset worth 2 STRAX.
DLT solutions (through transactions) track a wider range of assets than currencies which only exist in an electronic form. While cryptocurrencies need to be stored on a public blockchain to encourage maximum uptake and reward participation, DLT solutions often track real-world assets in cases where asset ownership is sensitive information. It is easy to see tracking real-world assets can go hand in hand with a blockchain solution that limits the participants who can see them.
Taking an example from the pharmaceutical industry, prescriptions can be stored as assets in a DLT solution. A patient owns their prescriptions in the same way that a user holds STRAX on the Stratis blockchain. Instead of each asset being a unit of STRAX (a number of Satoshi), one asset is assigned for each prescription. Information pertinent to each prescription is also held on the blockchain. A transaction is used to mark the prescription as fulfilled, which effectively spends the prescription, so it cannot be used again.
The Stratis DLT Solution draws upon elements of the Stratis Full Node, Stratis Sidechains and Stratis Smart Contracts.
Stratis DLT solutions are also very scalable. This allows for small-scale experimentations to be developed before being scaled up when the value in the solution has been proved.
Stratis’ understanding of what DLT is, and how it can serve enterprise clients, led Stratis to adapt their existing public blockchain technologies to create the Stratis DLT solution. In doing so, Stratis has created technology which is suitable for enterprsie adoption, enabling them to decide on the trade-offs between performance, resilience and privacy necessary for their use cases, and facilitating its adoption by the wide range of inustry and consortium users than would be the case if a public, permissionless blockchain were the only option available.