Have you heard of bitcoin? If so, then you might have heard of blockchain, the technology behind bitcoin. Or, you might not: you might be happily using the technology without being aware of what underpins it.

In essence, blockchain creates an electronic ledger using a distributed network of computers. Using cryptography, the users in the chain all maintain this ledger, cutting out the need for a central "authority" for the transactions. Each time a user wishes to update the ledger other participants in the network will run an algorithm, which will allow them to evaluate and verify a transaction. If the majority of the "nodes" consider that it looks valid, the transaction will be recorded on the ledger.  The ledger is continually being built upon, with transactions unable to be erased or modified. This characteristic makes it invulnerable to fraud, which is of particular interest to financial institutions which are currently among the industries exploring its usage. There are also numerous potential legal applications, e.g. simplifying the execution of contracts and verifying that a vendor is actually entitled to sell the real estate that he or she is purporting to.

This explanation is just the tip of the blockchain mountain: there are thousands of in-depth pieces written on blockchain out there on the internet. However, if you are still mystified, this article sets out a handy guide to how blockchain operates as a user, in the context of financial transactions. From the theoretical to the practical: you might be using blockchain without even knowing it....