In the Ethereum blockchain, “mining” is a term applied to the processing activity of powerful computers, all interconnected on the blockchain ecosystem, working to solve a cryptographic puzzle.
This “puzzle” is a combination of mathematical equations, and the computer or pool of computers (“miner” or “mining pool,” respectively) that correctly solves the equations the fastest, processes the newest block of the blockchain.
The integrity of the blockchain as a whole is verified with this cryptographic puzzle, called a “hash.” With it, all the blockchain’s transactions are agreed upon in their current state, and the miner is rewarded with Ether, Ethereum’s native cryptocurrency. In this way, the blockchain grows and remains healthy.
Mining offers an incentive to miners to help power the Ethereum network and keep it secure. When a miner is awarded Ether, it helps to incentivize healthy code since producing wasteful code is costly to miners. The mining process allows the blockchain to continue to run smoothly.
Mining is also used to secure the network from foul play. While miners are racing to solve these puzzles, they’re also verifying any work that is performed on the blockchain. This is done to prevent any retractions or double-spending. Double-spending is similar to someone trying to use the same exact cashier’s check at two different locations to pay for something.