Bitcoin was originally created by software developer with the pseudonym Satoshi Nakamoto who developed the electronic payment system and based it around mathematical proof. The result was a currency independent from central authorities and almost instantly transferable with very low transaction fees.

Since Bitcoin was introduced, there have been several hundred other cryptocurrencies enter the market. Being sold at a cheaper rate, they are a more accessible alternative to Bitcoin and have been aptly named altcoins. Current popular alternatives include Litecoin (trading at £47.75), Ethereum (trading at £229.24) and Dogecoin (A joke currency which currently has 100 million mined coins).

The main idea behind cryptocurrency was to create a secure and anonymous way to transfer currency from one person to another and since then it’s been heralded as ‘digital gold’. To promote the anonymity, Satoshi Nakamoto had to develop something new, this is when Blockchain, the digital ledger of Bitcoin transactions, was created.

Blockchain is a continuously growing list that records every cryptocurrency transaction and secures each block using cryptography. Each part of the chain contains a timestamp and transaction data which is approved and stored on a peer-to-peer network. The main security benefits of a blockchain is that once a block has been stored, it cannot be altered, ensuring that any cryptocurrency ledgers can’t be tampered with.

If you imagine a blockchain as a medical record and each entry as a block labelled with the date and time it was entered. These entries make up a history which is important for determining future treatments, so no one can alter these past records. However, the doctor will have a key that allows him to make new records, which adds to the block of entries.