Blockchain technology is a decentralized, distributed ledger system that securely records transactions across multiple computers. Each transaction is grouped into a “block,” and these blocks are linked in chronological order to form a “chain,” hence the name blockchain.

1. Transaction Initiation: A user requests a transaction, which involves the transfer of digital assets or information.

2. Broadcast to Network: The transaction is broadcast to a network of peer-to-peer (P2P) computers, known as nodes.

3. Validation: Nodes validate the transaction using consensus mechanisms like Proof of Work (PoW) or Proof of Stake (PoS). In PoW, miners solve complex mathematical problems to validate transactions and add them to the blockchain. PoS assigns the right to validate transactions based on the number of tokens held.

4. Block Creation: Once validated, the transaction is grouped with others to form a new block. This block is then added to the existing blockchain in a linear, chronological order.

5. Immutable Ledger: The added block is cryptographically secured and linked to the previous block, making the blockchain tamper-resistant. Any attempt to alter a block would require changing all subsequent blocks, which is computationally impractical.

This process ensures transparency, security, and trust without the need for a central authority. Blockchain technology is the backbone of cryptocurrencies like Bitcoin and has applications in various industries, including finance, supply chain, and healthcare.