Explained: The technology behind bitcoin and blockchain

To some, it’s a load of hot air. Others see a revolutionary technology that will transform the way we exchange nearly everything of value.

So what is this so-called distributed ledger technology (DLT), how does it work and who will benefit from it? In this animation, we separate fact from fiction and help you look beyond the hype.

Starting out as the foundation of cryptocurrencies like bitcoin, DLT has moved on in the last decade to encompass a whole host of other applications. Blockchain, the most famous example of DLT, has been exulted by some as the technology of the future and derided by others as a tool for fraud and money laundering.

That’s because it allow groups of people to store and transact data safely without the need for third party intermediaries, such as banks and lawyers. Advocates of the technology say this arrangement will also cut costs and speed up transactions.

DLT has been tipped to change the way we manage our private data and personal finances. There are also countless industrial uses, from finance to supply chains.

In addition, the technology also promises to tackle the trade in counterfeit goods, protect data from exploitation and fraud and keep accurate historical records of transaction trails that everyone among its users agree on.

Watch our explainer and let us know what you make of the technology in the comments below.