Revision · Economics & Incentives

Part 6 is the game theory beneath the cryptography: Bitcoin is designed so that the profitable behavior and the honest behavior are the same thing. Its throughline is that security comes from aligned incentives, not from assuming anyone is good.

What this part covered

• The 21M cap is emergent, not hardcoded — it falls out of two rules (new coins only in the subsidy; halving every 210,000 blocks), and scarcity is enforced by every full node rejecting an over-paying block, not by any mint’s promise.
• Divisibility and lost coins — a fixed cap stays usable because 1 BTC divides into 100 million satoshis, while millions of BTC lost to dead keys quietly make the effective supply tighter still.
• Miners spend real resources for two revenue streams — subsidy plus fees rent influence over the chain from physics, converting electricity and ASIC depreciation into ledger security.
• Honest mining is the profitable strategy — a 51% attack is expensive to sustain and self-defeating, because the attacker must first invest in the very asset the attack would devalue, so greed defends the chain.
• The security budget — total miner pay per unit time (subsidy + fees) is the bribe an attacker must beat; it’s valued in purchasing power, so a halving can still grow the dollar budget if price more than doubles.
• Block space as the scarce good — a fixed ~4M weight units per block is auctioned in sat/vB, a neutral permissionless rationing where the highest fee rate wins, with fees naturally volatile and self-correcting under congestion.
• Incentive-compatibility and Nash equilibrium — “everyone mines honestly” is a stable equilibrium where unilateral cheating doesn’t pay, a guarantee that gets stronger the more self-interested participants are.
• Honest caveats — selfish mining shows the guarantee is robust but not a closed theorem, and the scorecard is balanced by real critiques: volatility, fungibility erosion from chain analysis, base-layer throughput limits, intrinsic energy use, and the overreach of stock-to-flow.

The takeaway

The recurring answer here is that the people with the most power to corrupt the ledger are the ones with the most to lose from corrupting it, so self-interest and network security point the same direction. The one genuinely open question is the subsidy-to-fees transition by ~2140 — understand the mechanism (security budget = subsidy + fees, with subsidy → 0) and hold the conclusion loosely. Part 7 turns to wallets and keys: how you actually hold the authority to move coins on this ledger.