[Cryptography] Bitcoin, fork you very much

[John Levine]

>I grok the "proof of work" concept (why else are IoTs hijacked, for 
>example?) but I don't quite understand the ramifications, ...

The point of PoW is to limit the rate that blocks are added to the
chain.  In a private blockchain you could agree to a block creation
rate, but for a public chain like Bitcoin, you need a rate limiter
that's hard to do and easy to verify so people can't cheat.

> and why there's a finite limit (aside from sheer hardware).

People will make all sorts of pseudo-economic arguments but the real
answer is "because that's what the code does."  There's no
specification for Bitcoin other than what the original client program
(with a few widely agreed patches) does, and the other clients follow
that.

It's pretty clear that Bitcoin's popularity has little or nothing to
do with the decreasing mining rate.  There are plenty of new suckers
to bid up the price, and the supply shrinks every time someone loses
the key to a wallet.  We don't know how many old wallets are lost, but
speculation suggests quite a lot of them.

R's,
John