The blockchain is inspiring a new generation of financial services innovation, but blockchain technology is often pressed into service when it’s not the best fit for requirements, for instance, as a distributed ledger. A distributed ledger allows participants at different sites to maintain shared transaction logs. It can function as the backbone for funds transfer clearing houses or for any other dataset that needs to keep account balances consistent across replicas.
Blockchains typically aren’t optimized for transaction rate. Instead they focus on enforcing trust through proof of work. Adding participants does not spread the work out, instead it increases the total amount of work each must do. Most distributed ledgers don’t need to run among untrusted parties, so the blockchain is a poor fit.
When participants are trusted, an ACID compliant distributed database offers a simpler solution for a scalable distributed ledger. Fauna’s CTO Matt Freels gives an in-depth look at a ledger use case in this article about transactions. This blog post is hands-on with an example pet store application.