Definition
Double SHA-256 means applying the SHA-256 hash function twice in sequence. The output of the first hash becomes the input of the second. This is sometimes written as hash256(x) = SHA-256(SHA-256(x)).
Satoshi Nakamoto chose double hashing as a defense against length extension attacks, which are a theoretical vulnerability of single-pass SHA-256. In practice, this means ASIC mining chips must compute two SHA-256 rounds per hash attempt.
In Simple Terms
Applying SHA-256 twice in sequence, the specific hashing method Bitcoin uses for block mining.
