Part 6 · Economics & Incentives

Bitcoin’s security isn’t only cryptography — it’s economics. The system is designed so that the profitable behavior and the honest behavior are the same thing. This part is the game theory. It comes after consensus and the network, because the incentives only make sense once you know how mining and validation work.

Roadmap for this part

Read these in order — each builds on the last:

1. The 21 Million Cap & Supply Schedule — how a geometric halving series produces a fixed ~21M supply enforced by consensus rather than decree, and why divisibility to satoshis and lost coins matter.
2. Miner Incentives & the Security Budget — miners spend real resources for subsidy + fees; why honest mining is the most profitable strategy; and the long-run question as the subsidy fades.
3. The Fee Market — block space as the scarce good, bid for in sat/vB; congestion dynamics; and why fees matter more over time.
4. Game Theory: Why Honesty Pays — incentive-compatibility, why attacking is expensive and self-defeating, Nash-equilibrium intuition, and the selfish-mining wrinkle.
5. Monetary Properties & Honest Critiques — scoring Bitcoin against money’s classic properties, then the strongest honest critiques: volatility, fungibility, scalability, energy, and stock-to-flow.

The recurring question, applied here

How do incentives help untrusting strangers agree on one ledger? (Preview: honest mining pays better than cheating, so self-interest and network security point the same direction.)