What does Distributed Ledger Technology (DLT) primarily refer to?

Distributed Ledger Technology (DLT) primarily refers to a type of database that is shared and synchronized across multiple nodes or participants in a network. This technology allows for the secure and transparent recording of transactions, as all participants have access to the same information, which enhances trust and reduces the risk of fraud.

In a DLT system, each participant maintains a copy of the ledger, and any updates or changes made to the ledger are reflected across all copies, ensuring that all parties have the same information at the same time. This decentralized approach contrasts with traditional centralized databases, where a single institution controls the data.

This shared nature of the ledger is what underpins the functioning of various cryptocurrencies and blockchain applications, creating an immutable record that is difficult to alter or manipulate.

The other choices do not accurately reflect the concept of DLT. A centralized database managed by one institution (the second choice) fundamentally lacks the decentralization that characterizes DLT. The process of data encryption for security (the third choice) is a separate concept related to data protection, while software used for data visualization (the fourth choice) addresses a different aspect of data processing and presentation rather than the structural characteristics of a distributed ledger.