DLT vs Blockchain: What's the Difference and Why It Matters

The Language We Use Matters

In the world of distributed systems and cryptocurrencies, "blockchain" has become a catch-all term. People say "blockchain" when they mean any distributed ledger. But here's the thing: not all distributed ledgers are blockchains.

This distinction isn't just academic pedantry — it matters for understanding how different systems work, their trade-offs, and which one is right for your use case.

OnrampDLT uses the term "distributed ledger technology" (DLT) deliberately. Here's why.

What is a Distributed Ledger?

A distributed ledger is a database that is replicated, shared, and synchronized across multiple nodes (computers) in a network. Instead of a single centralized authority controlling the ledger, many participants maintain identical copies.

Key Characteristics of DLT

• Distributed: Data is stored across multiple locations
• Replicated: Each node has a full or partial copy of the ledger
• Synchronized: Changes to the ledger are propagated to all nodes
• Consensus-Driven: Nodes agree on the state of the ledger through defined rules
• Tamper-Resistant: Historical data cannot be easily altered

This is the umbrella term. Distributed ledger technology encompasses many different types of systems, each with its own architecture and consensus mechanism.

What is a Blockchain?

A blockchain is a specific type of distributed ledger. As the name suggests, it organizes data into sequential "blocks" that are cryptographically linked together in a "chain."

How Blockchains Work

Here's the structure:

1. Transactions are grouped: New transactions are bundled into a block
2. Blocks are linked: Each block contains a cryptographic hash of the previous block
3. Mining or validation: Nodes compete or cooperate to validate the block
4. Block is added: Once validated, the block is permanently added to the chain
5. Chain grows: The process repeats indefinitely, creating a chain of blocks

Examples of Blockchains

• Bitcoin: The original blockchain, using Proof-of-Work (PoW)
• Ethereum: Smart contract blockchain, transitioning to Proof-of-Stake (PoS)
• Cardano: Research-driven blockchain using PoS
• Polkadot: Multi-chain blockchain with parachains

Not All DLTs Are Blockchains

This is the crucial distinction. While all blockchains are distributed ledgers, not all distributed ledgers are blockchains.

Alternative DLT Architectures

1. Directed Acyclic Graphs (DAGs)

DAGs like IOTA's Tangle don't use blocks or chains. Instead, each transaction directly references previous transactions, creating a web-like structure. This allows for parallel processing and potentially infinite scalability.

2. Consensus Ledgers (Like XRPL)

The XRP Ledger (XRPL) uses a consensus protocol where validators agree on transaction ordering without mining or proof-of-work. Transactions are organized into ledgers (not blocks) that close every 3-5 seconds.

Key difference: There's no "chain" of cryptographically linked blocks. Instead, each ledger version contains a full state of all accounts and balances, and validators vote to close and finalize ledgers independently.

This is why XRPL is technically a distributed ledger, not a traditional blockchain.

3. Hashgraphs

Hedera Hashgraph uses a gossip protocol and virtual voting to achieve consensus without blocks or chains. Transactions are timestamped and ordered through a directed acyclic graph of "gossip events."

4. Holochain

Holochain is agent-centric rather than data-centric. Each participant maintains their own chain of transactions, and the network validates interactions between chains. No global ledger exists — only individual chains that interact.

Why OnrampDLT Uses "DLT"

OnrampDLT currently supports the XRP Ledger (XRPL), which is not a traditional blockchain. Using the term "blockchain" would be technically inaccurate.

Benefits of Using Precise Language

• Accuracy: Respects the architectural differences between systems
• Education: Helps users understand that not all distributed systems work the same way
• Clarity: Avoids conflating different technologies under one umbrella
• Future-Proofing: "DLT" allows OnrampDLT to support multiple ledger types (including blockchains) without rebranding

By saying "Your onramp to distributed ledger technology," OnrampDLT signals that it's a platform for accessing all types of distributed ledgers — whether they use blocks, DAGs, consensus algorithms, or other architectures.

Practical Differences: XRPL vs Blockchain

Let's compare XRPL (a consensus ledger) to a traditional blockchain like Ethereum.

Both are valid distributed ledgers, but their architectures lead to different strengths and trade-offs.

When Does the Distinction Matter?

1. Technical Understanding

If you're building applications or integrations, understanding the underlying architecture is critical. DAGs behave differently from blockchains, which behave differently from consensus ledgers.

2. Performance Expectations

Consensus ledgers like XRPL can finalize transactions in seconds without block confirmation delays. Blockchains may require multiple block confirmations for security, adding latency.

3. Terminology in Regulations

Some regulatory frameworks distinguish between different types of distributed ledgers. Using precise language ensures compliance and avoids misunderstandings.

4. Investor and User Education

Calling everything "blockchain" perpetuates misconceptions. Educating users about the diversity of DLT architectures builds trust and informed decision-making.

The Bottom Line

Here's the hierarchy:

• Distributed Ledger Technology (DLT): The broadest category, encompassing all distributed, replicated, and synchronized databases
• Blockchain: A specific type of DLT that organizes data into cryptographically linked blocks
• Consensus Ledgers (e.g., XRPL): Another type of DLT using validator consensus without traditional blocks
• DAGs: Yet another DLT architecture using directed acyclic graphs

They all achieve similar goals — decentralization, transparency, and tamper-resistance — through different means.

OnrampDLT embraces this diversity. Whether you're using XRPL today or another ledger tomorrow, the platform is designed to be your onramp to distributed ledger technology — however it's built.

Conclusion: Precision Empowers Understanding

Language shapes how we think about technology. By using "distributed ledger technology" instead of defaulting to "blockchain," we acknowledge the rich diversity of distributed systems and avoid conflating architectures that work in fundamentally different ways.

For users, this precision doesn't complicate things — it clarifies them. You don't need to be an expert in consensus algorithms or DAG structures. You just need to know that OnrampDLT provides access to secure, fast, and efficient distributed ledgers like XRPL.

The future of distributed systems is broader than blockchain. OnrampDLT is ready for that future.