Blockchain validates transactions in a decentralized network through a process called consensus. When a transaction is initiated, it gets broadcasted to multiple nodes within the network. These nodes then verify the transaction's legitimacy using complex algorithms, like proof of work or proof of stake. Once a consensus is reached, the transaction is bundled with others into a block, which is added to the blockchain, creating an immutable record. This decentralized approach enhances security and trust among users, as no single entity has control over the entire network, thus minimizing risk of fraud.