Whitepaper · brief original excerpt
“stay honest”§6 · Incentive · Satoshi Nakamoto · 2008 · Read in context ↗Bitcoin design context
Section 6 compares gains from following the rules with gains from attacking. Section 4 makes rewriting history costly through work.
The passages below are our reflections, not statements of religious belief by Satoshi Nakamoto.
Our understanding
An arrangement shows its strength when interests conflict. A system that works only when everyone is patient and selfless has difficulty sustaining cooperation. Bitcoin’s incentive discussion invites us to recognize calculations of advantage as part of design. Recognizing self-interest does not endorse every act motivated by it.
Useful arrangements make constructive conduct sustainable and destructive conduct costly. But people learn the rules and search for ways around them. Observe actual behavior, not just the designer’s intentions. A system that rewards the appearance of compliance may produce precisely that appearance and little more.
We still retain moral expectations. Incentives can assist cooperation without choosing worthy ends for us. Profitability does not establish desirability, and self-preservation does not establish justice. Responsibility considers efficiency together with beneficiaries, injured parties and longer-term consequences.
Ideas in everyday life
Rewarding article counts may discourage careful checking; rewarding attention may encourage sensationalism. Examine the costs an incentive ignores. Bitcoin draws attention to the connection between conduct and reward, but no arrangement is exempt from evaluation of its actual effects.
Reflection in practice
Examine one rule from the perspective of an honest participant, an opportunist and an affected bystander. What does it reward, and who can transfer costs to others?