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Blockchain operates as a decentralized, distributed ledger technology that records transactions across a network of computers. Each transaction is grouped into a block, which is then linked to the previous block, forming a chain. This structure ensures that once data is recorded, it is immutable and transparent.

When a new transaction is initiated, it is broadcast to a network of peer-to-peer nodes. These nodes validate the transaction through consensus mechanisms such as Proof of Work (PoW) or Proof of Stake (PoS). Once validated, the transaction is added to a new block, which is appended to the blockchain in chronological order. The decentralized nature of blockchain ensures security and trust, as altering any single block would require altering all subsequent blocks across the entire network, a feat virtually impossible to achieve. This technology underpins cryptocurrencies like Bitcoin and Hela, enabling secure, transparent, and tamper-proof transactions without the need for a central authority.

Beyond cryptocurrencies, blockchain is being explored for various applications, including supply chain management, voting systems, and digital identity verification, due to its robust security and transparency features.