A distributed ledger operates on a peer-to-peer network in which each participant, or 'node,' holds a copy of the entire database. Transactions are recorded in blocks, which are securely chained together using cryptographic techniques to form a complete transaction history that is immutable and transparent. Unlike traditional ledgers, which are centralized and controlled by a single entity, distributed ledgers share transaction data among all participants, ensuring that everyone has access to the same information simultaneously, maintaining data integrity, and mitigating risks of fraud or manipulation.