Moore’s Law Built Into The Bitcoin Incentive Structure

Below is a private conversation with a friend that addresses a common question on Moore’s Law being built into the Bitcoin incentive structure.  I get a lot of questions about this, so I felt it was easier to share this conversation instead of re-creating it everywhere on Twitter. – Preston

Finally, I’ve also found that some people like to dance-around the definition of Moore’s Law, instead of focus on what’s important (which is the incentive structure).  For instance, here’s a classic response (performed in an aggressive way).

Moore’s Law doesn’t need to perfectly double every two years to continue to provide the incentive structure to the network.  It just needs to provide enough advantage to new miners to be valid.  You might ask, well, what is enough?  To that, I’m not sure, but without a drastic change in the progressive price deflation for newly purchased mining hardware, the incentive will continue to persist.  Finally, this incentive structure only needs to persist until escape velocity is reached.  After it is reached the incentive structure that Moore’s law provides won’t matter.  Based on the accelerative inflationary policies of central banks, I suspect escape velocity will occur well before the Moore’s law incentive structure becomes obsolete or drastically degraded.

P.s. If you have bad form in your communications, I block you.  But, with that said, I really like people raising quality critical thinking…. so…just be nice.

Thanks for reading

-Preston