Why is it called 316 mining

A plain English explanation of Bitcoin mining. Bitcoin has miners because people want bitcoins, but something here seems silly: When gold is mined, nothing is achieved beyond the discovery of new gold.

When bitcoins are mined, however, a valuable service is provided to the Bitcoin network: Double Spending Bitcoin relies on miners to record and validate transactions because of a particular problem inherent in any system of digital currency: Double spending is the high-tech incarnation of counterfeiting.

In the physical world, probably. In the digital world, probably not. The cost of that activity, alongside moral scruples and the threat of arrest, keeps counterfeiting in check.

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To fix this, the inventors of Bitcoin designed a system of network interactions, a protocol, that checks each putative Bitcoin transfer against a public ledger called the blockchain. How Does Mining Work? Listening for Transactions Bitcoin miners connect to the Bitcoin network like telephone operators. Miners use their computers to listen for transaction requests across the entire network and assemble a list of valid transactions.

Bitcoins are not sent and received like file attachments in an email.

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There are no files at all, only assignments of bitcoins made to various public addresses. Each public address has a matching private key and only the holder of that key is capable of digitally signing a new transaction request. Additionally, the request must have inputs. Inputs are the previous transactions that the sender is using to fund the new transaction.

If you previously received five bitcoins from Alice and four from Bob, you can list these inputs to fund a new transaction to Cynthia of up to nine bitcoins in value. Miners check two things when they hear your request. First they check to make sure that your digital signature proves that you were actually the recipient of those inputs.

To perform this second check, miners peak at a public database of all valid past transactions, called the blockchain, to see if those inputs were already used in a transaction or if they are still available.