© Andrey Rudakov/Bloomberg/FT Montage

A blockchain is a decentralised database, or electronic ledger, of transactions. It is distributed among its users, who also validate the records added to it. This structure enables the transfer of digital assets without the need to go through a central party, such as a bank, broker or intermediary — making transactions quicker and easier.

Transactions are recorded in blocks of data that are ‘chained’ together in a specific order, and protected using complex computer ‘hash’ codes. As a result, the details are almost impossible to alter.

Click on each stage in the graphic below to understand how a blockchain works.

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