Blockchain technology is a decentralized, distributed ledger system that securely records transactions across multiple computers. It operates on a network of nodes that validate, verify, and store transaction data in blocks. Each block contains a cryptographic hash of the previous block, effectively linking them into a chain. This structure enhances security, as altering any block would require consensus from the network. Additionally, blockchain offers transparency and traceability, making it valuable in various applications, including cryptocurrencies, supply chain management, and contract enforcement.