Differences to know between Blockchain and a Banking Ledger

For hundreds of years humans have been maintaining records of financial transactions. The records were recorded on clay, leafs, papers and now digitally.

Bookkeeping & accounts have come a long way. However, after technology upgradation, Blockchain technology is looking to change the way we keep records on digital ledgers.

With evolving times, we have been changing and adopting new technologies to make things better and secure. New innovations are promising, secure, fast, and decentralized in nature-changing the traditional values of ledgers.

Blockchain technology has now been considered to be one of the most revolutionary technologies of the new age and many believe that it will be the technology of the future. 

Though Blockchain technology is at a very early stage, it will have to do more to take over the current banking ledger system that we have been using for a few hundred years. Central banks only share their ledgers with financial institutions including banks, but the ledger on Blockchain platform is always open for anyone to access it, as it is decentralized. 

Even though both have ledger systems, Blockchain and banking networks are still different in many aspects. A Blockchain is a distributed digital ledger while banking is a central ledger in digital or physical form.

Let us look in detail at the difference between a blockchain and a banking ledger.


Blockchain technology is a public immutable completely decentralized global ledger, meaning that for any transaction done on the platform it does not require any third party like banks, government to verify it.

In the traditional banking system, all transactions are facilitated by trusted third parties like other banks, governments, and other intermediaries. Without verification from the third parties, no transaction can be complete. 

Open ledger

Blockchain transactions are recorded onto the open ledger with the consensus of all the members of the group. Only once more than 50% of the group accepts and agrees to the proof of work, the transaction will be recorded into the Blockchain. Being a public ledger, all the members can see all the transactions. 

On the other hand, Banking ledgers are normal ledgers which are maintained and updated by banks centrally through their back offices. They are privately held by the banks and only the authorized account holder can see their details.


Blockchain technology is very transparent because it is based on a distributed ledger system. The transactions are public with the owner’s consent. Every transaction has a copy and any relevant information can be viewed by interested individuals. The information and transactions are in control of users and owners.

Whereas, a traditional banking ledger is kept isolated, private and closed. It is not in a public domain and only been accessed by financial institutions as it manages the viewership of records.


Blockchain can automate execution of contracts. Like in smart contracts, the terms are encrypted using keys of both the parties, and are distributed over the network so these are traceable, but irreversible (because of the use of a particular timestamp, that is successive of previous and preceded of the next), which makes things easy and more secure.

However, in a traditional banking setup, one has to contact the central authority to make any change, share the information. This process takes days and clients lose money because of the interchange of currencies (besides commission).


Data on the Blockchain technology is immutable and can’t be tampered, altered or deleted. It cannot be erased, lost and can keep track of all the transactions without the fear of even getting seized.  

However, the banking ledgers can be edited, deleted, modified and are reversible.


It takes a lot of time, sometimes even days for banks to clear transactions and reach final settlements in case of cross-border payments days. 

But, on the other hand, once a transaction is processed on a Blockchain platform, it takes only minutes to reach the end-user. There is a time limitation in the traditional banking system, but in Blockchain it is accessible 24 hours a day. The participation of anyone in the blockchain is permission-less, around the world.

As Blockchain data is complete, consistent, accurate, and widely available, many banking sectors are adopting blockchain technology for a better grip on transactions. 


Every year banks and other financial institutions across the world spend a huge amount to verify their customers under KYC (know your customer) certain programs and other regulations that they have to follow, to reduce illegal activities like financial terrorism and money laundering. 

With Blockchain, this could easily be cut down to a minimal possible amount, as information gathering about a particular client needs not to be duplicated by different organizations.  

With the rise of Bitcoin based on Blockchain technology, it has been growing with many use cases. One such is the banking sector that has realized its importance and benefits it offers. Many banks and financial institutions have already adopted it.

It only shows that Klever technology always makes its own path!

Jagdish Kumar
Klever Writer
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