# Distributed Ledger Technologies and Their Applications: A Review
## 2 Distributed Ledger Technology
### Blockchain
#### 2.1.1 Blockchain Life Cycle  
The transaction is built by a node and signed by its private key, which can be accessed by its own public key. A gossip protocol is used to send this transaction to the network [70]. The next peer-named miners select some number of transactions for validation and verification. The miners create a block based on those verified transactions and attempt to get that block approved by the network. In this step, consensus algorithms play an important role in determining which miner is eligible to create the next block [71]. For instance, the Bitcoin network uses proof of work to ask miners to solve a difficult math puzzle in order to be eligible to add a new block. This algorithm requires the miner to pay a high price for securing the validation of transactions. In Bitcoin, a reward is given for making a block, and some Bitcoin is given to the miner who solves the puzzle and adds the new block to the network. To keep track of all transactions in recent blocks, the new block will be linked to the chain by hash algorithms. To show the order of blocks in the chain, each block stores a hash of its previous block. Additionally, they include the number of transactions based on their size, which varies depending on the technology. Because all ledgers and peers in the Blockchain network have copies of the blocks, they can be tracked. Figure 2 illustrates the lifetime of a transaction and the addition of a new block to Blockchain.  
Blockchain technology can be classified from many perspectives. Depending on how a node joins the Blockchain network, it can be classified as public or private. The Bitcoin Blockchain, which is the quintessential example of a public Blockchain, is entry/exit free. In private Blockchain networks, only known nodes can enter the network [72]. Cryptocurrencies can be divided into two categories based on the way they are generated and distributed.  
The first category includes cryptocurrencies created by the first transaction on the genesis node, which is then distributed among stakeholders. The second category includes cryptocurrencies that are generated over time and distributed. There are different methods for the generation process, depending on the type of cryptocurrency. With proof of work, miners are rewarded with cryptocurrencies for solving difficult problems, e.g., Hashcash [73] in Bitcoin. As an alternative to the proof of work, the proof of stake is another approach [44]. Proof of stake enables a miner who possesses more cryptocurrency to have  
Figure 2: Blockchain life cycle.  
a higher chance of placing blocks in the Blockchain and earning coins. However, in proof of work, the power of the miner's processors determines their ability to create a new block and acquire coins as a reward. Further, there are other approaches, such as proof of burn, which is used in cryptocurrencies such as Slimcoin, where miners earn Slimcoin in exchange for destroying another cryptocurrency such as Bitcoin [73].  
Although Blockchain technology has many benefits, it also has many disadvantages. The disadvantages of Blockchain technology are outlined below.