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It's known as Moore's Law after Gordon
Moore. As an engineer at Fairchild in the 1960's, Moore published an article
that noted how the power of computer chips kept doubling about every eighteen
months or two years. By power, he meant the number of transistors that could fit
on a given-sized chip.
Let's say you invested a dollar in 1965 and it doubled every two years -- sixteen doublings, thirty-two years, 1997. Would you be willing to wait just four more years for it to turn into $262,000? OK. Now, it's 2001. Would you be willing to wait four more years for it to turn into over a million?
2
4
8
16
32
64
128
256
512
1024
2048
4096
8192
16,384
32,768
65,536
Not bad for a $1 investment. It's the same reason why chain letters or multi-level marketing schemes are a joke. The pyramid shape gives rise to the term pyramid scheme or pyramid scam.
Let's say you start with ten people and they each involve ten more. By the fifth round, you have involved every man, woman, and child in Western New York. Two rounds later, you have half the U.S. population feeding you money. Right. To whom, pray tell, are they selling? The other half?
100
1,000
10,000
100,000
1,000,000
The same inexorable law of exponentials turns absurd when applied to people. If the Internet keeps growing at its current rate, every person on the planet will be emailing and surfing in a few years. Yet most of the humans alive today have never used a telephone. My study of history tells me that they never will. Nor will they ever be online. The number of humans has a finite, though large, limit.
But what happens in the other direction, getting small? What's the limit? Atoms, electrons? Washable computers in collar threads?
Well, look what has happened with transistors. Moore's Law has held for decades. Not only has power doubled, but the price of memory chips has dropped by half at about the same frequency. Said another way, a dollar buys about twice as much memory every two years or so.
Gordon Moore now runs Intel, which makes the chips that validate his "law". Take a look at the chart below, reproduced with permission from ACM. If you aren't sure about the significance of the uneven hash marks on the left or the superscript numbers next to the 10's on the x-axis, you need to review logarithms.

Learn more about other Pioneers of the Internet and why Moore's Law has its own page in Intel's Processor Hall of Fame. Note pictures of the growth in complexity of Intel's chips -- fourteen versions over twenty-eight years, just as Moore's Law predicts.
Chip
Innovators Vow To Enforce Moore's Law
by Mike Martin
NewsFactor Network, January 29, 2003
Quantum computers, which use up and down atomic spin in place of binary code zeroes and ones, may be subject to less thermal noise by losing less energy to heat. This encouraging notion may accelerate efforts to fabricate the first functional quantum chips.
The Lives and
Death of Moore's Law
by Ilkka Tuomi
First Monday, November 2002
Moore's Law has been an important benchmark for developments in microelectronics and information processing for over three decades. During this time, its applications and interpretations have proliferated and expanded, often far beyond the validity of the original assumptions made by Moore. Technical considerations of optimal chip manufacturing costs have been expanded to processor performance, economics of computing, and social development. It is therefore useful to review the various interpretations of Moore's Law and empirical evidence that could support them.
Intel
transistor paves way to 20GHz chips
ZDNet News, June 11, 2001
Intel, the world's largest semiconductor maker, has developed what it says is the fastest and smallest transistor ever. The breakthrough means that Moore's Law, which stipulates that the number of transistors on a chip doubles every two years, will remain on the books until at least 2007.
Chip
revolution turns 30
by Michael Kanellos
ZDNet, November 14, 2001
The foundation of modern computing was something of an
accident. The Intel 4004 Microprocessor, which debuted thirty years ago
Thursday, sparked a technological revolution because it was the first product to
fuse the essential elements of a programmable computer into a single chip.
Since then, processors have allowed manufacturers to embed intelligence into
PCs, elevators, air bags, cameras, cell phones, beepers, key chains and farm
equipment, among other devices. ...
In 2000 alone, 385 million microprocessors were shipped and 6.4 billion
microcontrollers went out factory doors.
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