Blockchain technology is a decentralized, digital ledger system that records transactions across multiple computers in a secure and transparent manner. It works by chaining together blocks of data, which contain information about transactions, timestamped and linked to the previous block. This creates a tamper-resistant, chronological record of transactions that can be easily verified by anyone with access to the blockchain. The decentralized nature of blockchain technology eliminates the need for intermediaries, making it faster, cheaper, and more secure for conducting transactions.