IBM QRadar's Building Blocks are components that group commonly used tests for building complex rules, allowing network administrators to test specific sets of IPs or events without associated actions. Custom rules in QRadar detect unusual network activity by analyzing events and flow data, utilizing a custom rules engine to generate alerts when specific criteria are met. Local rules process data on the individual event processor, while global rules allow for cross-processor event matching, optimizing detection of coordinated anomalies such as multiple login failures.