Ledger

A ledger is a record of transactions and balances. In crypto, it’s usually a network’s shared record.

What is a ledger?

A ledger keeps track of transactions that have taken place. The network can use it to determine which addresses hold which balances.

Before a transaction is recorded, participants check that it follows the rules. For example, they check whether the sender is allowed to spend the crypto. Consensus rules, or agreements within the network, create a shared transaction history. This helps prevent the same funds from being spent twice.

A blockchain is a special type of ledger. Transactions are stored in blocks that are cryptographically linked to each other. A ledger isn’t always public or decentralized; a single organization can also manage the record.

Note: Ledger, with a capital L, is also a manufacturer of hardware wallets. A device like this protects private keys, not the crypto itself. The balances are recorded on the network.

An example of a ledger

Someone sends 0.01 bitcoin to another address. Once the transaction is recorded on the Bitcoin blockchain, it appears in the shared ledger.

This lets the network see that the recipient can spend the bitcoin according to the network’s rules. It shows how a ledger keeps track of the history of funds.

Why is a ledger important in crypto?

A shared ledger makes it possible to verify transactions without relying on a single central party to manage the records. That’s why the term often comes up in news about blockchain technology, transaction processing, and network security.

A public ledger doesn’t automatically mean users are anonymous. Transactions are often visible, even if an address doesn’t directly show a name. Also, a correctly recorded transaction doesn’t prove that a payment was voluntary or lawful.

If you’re reading news about a Ledger hardware wallet, it’s about the company or its products. That’s different from a ledger as the transaction record of a blockchain.