Blockchain technology enhances security in digital transactions through its decentralized and immutable nature. Each transaction is recorded in a block that is linked in a chronological chain, making alterations nearly impossible. This distributed ledger technology ensures that data is validated by a network of computers, reducing the risk of fraud and hacking. Additionally, blockchain employs advanced cryptographic techniques to secure transaction data and enable user privacy. The consensus mechanisms further bolster security by ensuring that all network participants agree on the validity of transactions, creating a transparent and trustworthy system for digital exchanges.