I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.
In current (too small) bitcoin society, number of miners roughly equal to number of acceptors, the persons who buy & sell for bitcoin & do BTC/$ exchange. It is a *psychological* law for the small society, number of miners ~ number of adopters, because bitcoin's UFO-like nature for 'average Joe'.
See, Difficulty was some 240000 FEW days ago, and will be some 440000 FEW days later.
Because bitcoin society is too small, I, being 'average Joe', do not trust in it: not because it is cryptographically insecure, but because I doubt in guarantee to easily buy & sell & exchange for BTC world-wide. Now it is something possible but TOO tricky and risky.
But, the cryptographic idea of bitcoin is very nice, so I being 'average Joe', want to join and risk.
But, because I do not trust in terms of sell-buy, I decide to risk as miner: to buy a computer with ATI 5850x2 GPU to start mining. Or even I have this computer with one ATI 5950 as typical computer-gamer. I want switch it for mining in my free nights.
So, FEW days ago I DECIDED to risk and mine. There are not abstract FEW days - they counted from TODAY, 25 may, 2011! Counter is ticking NOW and HERE.
Then, I wake up FEW days later (because I was walking, dancing, drinking etc) and DISCOVER, if I start to mine FEW days later, I lost HUGH amount of profit. If I start to mine (FEW+1) days later, I lost HUGE*2^1 amount of profit. If I start to mine (FEW+2) days later, I lost HUGE*2^2 amount of profit. etc.
This is ROUGH estimate, of course - but this is sufficient.
I DISCOVER EVEN I DID start mining YESTERDAY I have 99.99% possibility that my computer-miner will NOT be compensated by profit at all!
Important, that difficulty-doubling interval is FEW days now, not FEW years or even FEW months.
So I REJECT this CRAZY idea to mine.
I still can risk to play with BTC/$ on exchange, within time interval of few days. BUT As in casino, or Russian roulette.
But I never start buy or sell or exchange for BTC the real goods and dollars in SERIOUS business, because I DO NOT trust that too small bitcoin society allow me to easily input or output real dollars or real gold.
So I REJECT enter the bitcoin society as acceptor TOO.
I being 'average Joe' DOES REJECT bitcoin currency idea at all.
You, 10 000 miners & adopters stay isolated, but 10000 people spread world-wide can-not make solid economy, due to unable of diversification of goods being sell or bought by BTC, neither guarantie for real dollar/gold to easily input/output from TINY needle's eye of some 10 000 members of bitcoin society.
So, 10 000 CURRENT members of bitcoin society will be isolated, rejected by the rest of world -- 'frozen', and start decay quickly.
I have introduced new difficulty algorith's normalization formula, to allow some 1 000 000 - 10 000 000 people world-wide to join bitcoin society as miners, BEFORE considering this society as economics with easy buy/sell/exchange.
Then, some premium members call me THE 'idiot'.