Blockchain facilitates trust in transactions by providing a decentralized and immutable ledger for recording data. Each transaction is encrypted, time-stamped, and linked to previous transactions, ensuring that data integrity is maintained. This transparency allows all parties involved in a transaction to verify information independently, reducing the potential for fraud and mistakes. Smart contracts, built on blockchain technology, further automate and secure agreements, enhancing trust between parties without the need for intermediaries, ultimately transforming various industries from finance to supply chain management.