Doesn't the difficulty adjustment use the timestamps of blocks (external continuous time source)?
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Bitcoiners love to idolize bitcoin as if it didn’t just solve the Byzantine Generals Problem but also solved for time, humanity, and any other problem.
Scroll to bottom for an answer from one of the main Core devs…
https://bitcoin.stackexchange.com/questions/96185/does-cryptocurrency-really-need-timestamps
Yes the difficulty adjustment references block timestamps, which ultimately come from external human time. But this does not alter the ontology of Bitcoin’s internal time. Timestamps are used to regulate rate, ensuring that block production tracks human chronological expectations. They do not define Bitcoin’s temporal substrate.
The smallest unit of temporal change in Bitcoin is still the block, an irreversible thermodynamic event created through proof-of-work. Whether those events occur faster or slower relative to wall-clock time is irrelevant: the ledger’s internal time advances only when a block is found. Timestamps adjust the equilibrium; blocks constitute time itself.