What does it mean to "align incentives"? I think this is a…

To understand the concept, let's change contexts completely.

Consider a particle. A particle may have mass, implying that it has inertia, as well as a direction and magnitude of travel - a vector.

For this particle alone, alignment is a meaningless idea. There is nothing to compare it to.

When in a group with many particles, you can start to determine whether their motions - their vectors - are aligned.

In a chaotic, unaligned system, particles are flying every way, with no real constraints and no coordination, directly or indirectly, with the other particles.

Particles bump into each other, redirecting each other's course, taking or giving energy, etc.

Now apply a force to all particles at once. Let's call this 'gravity'.

All particles are now pulled downwards, and as such, they have a certain level of alignment in that they are all, always pulled downwards.

But once they hit a barrier, (the floor,) this alignment falls apart. More massive particles (those affected more by gravity) tend to move closer to the bottom over time, while those with less mass tend to be kept higher.

In this scenario, gravity aligns incentives, but it does not maintain alignment when a barrier prevents it. Nevertheless, this system is less chaotic than one with no alignment whatsoever.

Consider a pipe with an input of particles on one end.

In this scenario the existence of particles as inputs on one end act to create alignment for all particles in the pipe, as all particles act on one another, and the barriers create internal pressures.

The addition of inputs creates internal forces that drive all particles down the pipe. It is the barriers of the pipe, combined with the existence of inputs that makes this alignment possible.

Under the proper circumstances, the flow of these particles turns from chaotic (turbulent) to aligned (laminar).

This is what Bitcoin achieves when scale is applied to the system.

Bitcoin is a pipe, and so long as the individuals using Bitcoin do not leave that pipe, (and the pipe isn't broken, or barriers added within it,) their incentives find alignment with all other players in Bitcoin.

This analogy isn't perfect, but on a conceptual level, it does help to visualize the concept of "incentives" as the forces applied to a particle, whether by other particles, boundaries, or things like gravity.

The biggest takeaway, though:
The particles/people are independent, with their own desires, values, etc. but the incentives themselves work with this, not against it.

Particles are not the same, but the forces act on them nonetheless.

//Thread