Distributed Ledger Technology Systems: A Conceptual Framework

97 Pages Posted: 7 Sep 2018 Last revised: 3 Nov 2018

See all articles by Michel Rauchs

Michel Rauchs

University of Cambridge - Cambridge Centre for Alternative Finance

Andrew Glidden

University of California, Berkeley - School of Law

Brian Gordon

University of Utah - David Eccles School of Business; University of California, Merced

Gina C. Pieters

University of Chicago - Department of Economics; Cambridge Centre for Alternative Finance

Martino Recanatini

University of Cambridge - Cambridge Centre for Alternative Finance; Marche Polytechnic University

François Rostand

University of Cambridge - Cambridge Centre for Alternative Finance; University of Cambridge - Department of Chemical Engineering and Biotechnology

Kathryn Vagneur

University of Cambridge - Cambridge Centre for Alternative Finance

Bryan Zheng Zhang

Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge

Date Written: August 13, 2018

Abstract

The distributed ledger technology (DLT) ecosystem is currently plagued by the use of inconsistent definitions and lack of standardised terminology. This report sets out to provide a common terminology and framework designed to serve as a multi-dimensional tool for policymakers, industry participants, researchers and investors to gain a better understanding of the characteristics and inner workings of a DLT system, and the roles that various actors play in the system Specifically, the report lists five key characteristics that a DLT system must be capable of ensuring. The report also clarifies the forms of data within a DLT structure, by classifying the data as 'transactions', 'logs', 'records', 'journals' and 'ledger' – based on the extent the data has been processed by a DLT system's network. The final outcome – the 'ledger' – is defined as a set of records 'held in common by a substantial proportion of network participants'. A conceptual framework is presented that divides a DLT system into three main layers – protocol, network, and data – which can be further subdivided into a set of components and processes. The report outlines various configuration options for each process and demonstrates how specific design choices can lead to different system properties and characteristics. A key takeaway is that trade-offs are inherent to DLT systems, and move along a spectrum according to specific security assumptions, threat models, and trust relationships. The framework is applied to six case studies of existing DLT systems – Bitcoin, Ethereum, Ripple, Alastria, Verified.me, and an anonymised DLT system – to illustrate its use for performing a comparative analysis. The report concludes by presenting a DLT systems ecosystem diagram that visually maps major DLT systems according to various dimensions taken from the framework.

Keywords: Distributed Ledger Technology, DLT, Blockchain, Cryptocurrency

Suggested Citation

Rauchs, Michel and Glidden, Andrew and Gordon, Brian and Pieters, Gina C. and Recanatini, Martino and Rostand, François and Vagneur, Kathryn and Zhang, Bryan Zheng, Distributed Ledger Technology Systems: A Conceptual Framework (August 13, 2018). Available at SSRN: https://ssrn.com/abstract=3230013 or http://dx.doi.org/10.2139/ssrn.3230013

Michel Rauchs (Contact Author)

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Andrew Glidden

University of California, Berkeley - School of Law ( email )

Berkeley
United States

Brian Gordon

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

University of California, Merced ( email )

P.O. Box 2039
Merced, CA 95344
United States

Gina C. Pieters

University of Chicago - Department of Economics ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

HOME PAGE: http://https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/

Martino Recanatini

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Marche Polytechnic University ( email )

Piazza Roma, 22
Ancona, 60121
Italy

François Rostand

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

University of Cambridge - Department of Chemical Engineering and Biotechnology ( email )

Cambridge
United States

Kathryn Vagneur

University of Cambridge - Cambridge Centre for Alternative Finance ( email )

10 Trumpington Street
Cambridge, CB21QA
United Kingdom

Bryan Zheng Zhang

Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.jbs.cam.ac.uk/ccaf

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