In this case rewards are highly nonlinear, not proportional to processing work at all.
The value measure is how good performance is relative to competitors, with a vastly greater than linear reward if it is
I expect energy use (and other performance costs) do not matter much once your winning proof-of-work competitions due to higher performance (as apposed to simple scaling of hardware)
Given this is an experimental device it’s probably only the fab cost that is a barrier
Interesting, I was under the impression that for mining cryptocurrencies 10x the amount of machines was equivalent to 1 machine at 10x the performance.
So I guess this means that cryptocurrencies are akin to a winner-takes-all situation. Raising the question: is that how we want our monetary systems to work?
Yes its interesting both because of the series of winner-take-all competitions, but also because while cost-of-processing X computations is linear with scaling, the processing threshold X is not a constant, but a variable based on competition.
You are incentivized to increase costs/performance wherever that will allow you to win competitions.
What costs do that? Any cost that increases your speed faster than linear - i.e. transitions to new hardware tech.
Note that if the cost of the transition is achievable but extremely high, that actually makes the transition more attractive. It is a barrier to followers who won't be rewarded as much for their investment as the first to do so will be.
Well it's not exactly "winner takes all". It's more like: The current winner takes a little bit, for a while, until the next winner emerges (usually through development or commoditization of new technology). There was a situation like that in Bitcoin when ASICs first started out when everyone else was still doing GPUs and few people had FPGAs. BTC survived.
