What Traffic Engineering Tells Us About the Ethereum Merge

When traffic engineers add lanes to a road, they assume doing so will reduce traffic jams. Intuitively, it makes sense. Roads get congested because too many people are driving on them, right? Add a lane, and congestion should go down.

Unfortunately, this doesn’t work in the real world. If you add another lane to a road, it doesn’t actually reduce congestion very much. Why? Now that drivers see the road is bigger, more people choose to drive on it.

Maybe before, they would’ve used public transit or taken a surface road. Seeing that a shiny new lane has opened, though, they come in droves. Traffic jams can actually increase when you add capacity to a road.

This strange phenomenon is called induced demand. It applies to traffic engineering, and it almost certainly applies to crypto mining as well.

Read More