What does conda do when "solving environment"

You can add --debug option to the conda command and see the output from console(or terminal). For example, type conda update --debug numpy. From the output, we can see that the client requests repodata.json from channel list and do some computation locally in the Solving Environment Step.

As a side note on the "Solving Environment" step...
Lack of administrator privileges may affect whether or where you can install python packages.

I observed that my installs would hang on the "Solving Environment" step and never get through when attempting to install packages while logged in as a non-administrator.

Getting switched to admin was possible for me on the machine I was stuck on, so I just did that and it solved the problem.

Commenter explains workaround when this is not possible.

JUST WAIT! I wasted hours trying to fix this. It turns out, it just took around 45 minutes :/

conda install --prune <<package>> helped me to install the right channel.

Suspecting environment used are for zipline and channel used not compatible with existing one. prune takes a lot of time but helped me in solving the environment issues.