What does 'mining' refer to in the context of blockchain?

In the context of blockchain, 'mining' primarily refers to the process of verifying transactions and adding them to the blockchain. This involves solving complex mathematical problems through computational power, which ensures the security and integrity of the blockchain. When miners successfully solve these problems, they validate the transactions within a block and subsequently add that block to the existing chain of blocks.

This process not only secures the network by preventing fraudulent activities but also incentivizes miners through the reward system, providing them with cryptocurrencies for their efforts in validating transactions. Therefore, mining plays a crucial role in the overall functionality and security of blockchain systems.