Blockchain technology comprises three fundamental components: blocks, chains, and consensus mechanisms. Each block in a blockchain contains a list of transactions and a reference to the previous block, forming a chain of blocks that creates a secure and immutable ledger.

Blocks serve as containers for data, holding information about multiple transactions. These transactions could involve various activities, such as cryptocurrency transfers, smart contracts execution, or any data record deemed suitable for the blockchain. The block includes a unique identifier called a cryptographic hash, generated using the information in the block and the hash of the previous block. This hash not only secures the block's integrity but also links it to the entire chain.

The structure of a block typically consists of a header and a body. The header contains metadata like the timestamp, nonce (a number used in mining), and the hash of the previous block. The body comprises the actual data, which could be a set of transactions or any information relevant to the blockchain's purpose.

As new transactions occur, they are grouped into a block. Miners or validators then compete to solve complex mathematical problems, and the first to solve it adds the block to the chain. Once added, the block is cryptographically connected to its predecessor, creating a continuous, secure, and tamper-resistant ledger that is the hallmark of blockchain technology.