Distributed Ledger Risk

Definition ∞ Distributed ledger risk refers to potential hazards associated with the operational and technological aspects of decentralized ledger systems. These risks include vulnerabilities in consensus algorithms, smart contract code defects, or issues related to network decentralization. Such factors can compromise data integrity or system availability. This presents a challenge to system reliability.
Context ∞ As distributed ledger technology (DLT) gains wider adoption across various industries, assessing and mitigating distributed ledger risk becomes paramount for enterprises and regulators. News often highlights incidents where these risks materialize, underscoring the continuous need for robust security audits and resilient system designs to protect user assets.