When does function iteration converge to a fixed point?

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After watching a Youtube video by blackpenredpen (only 54 seconds long) showing how to write 5 as an infinite nested square root it got me thinking.

This is what he showed in the video:
$ \begin{align} x &= 5 \\x-5& = 0 \\(x-5)(x+4)&=0 \\x^2-x-20&=0 \\x^2&=20+x \\x&=\sqrt{20+x} \\x&=\sqrt{20+\sqrt{20+x}} \\x&=\sqrt{20+\sqrt{20+\sqrt{20+\sqrt{20+\sqrt{20+x}}}}} \end{align} $

$x$ converges to 5 with the above infinite square root. Nothing weird about that, I tried multiplying by other equations instead of $(x+4)$ and got other fun infinite square roots. $x=\sqrt{10+3\sqrt{10+3x...}}$ and $x = \sqrt{30-\sqrt{30-\sqrt{30-x...}}}$. Both converge to 5 too, all good.

However I wanted to see if it would work without using square roots everywhere. So this is what I tried:
$ \begin{align} x^2&=20+x \\x&=x^2-20 \\x&=(x^2-20)^2-20 \end{align} $

Both $x=x^2-20$ and $x=(x^2-20)^2-20$ diverge (tested by iterating with code), and I have no clue why and I want to know why. My guess would be that it has something to do with the derivative. The derivative at the interesting point, $x=5$, is $\frac{d}{dx}(x^2-20)=2x=10$. And it does not converge. The derivative of one that does converge is $\frac{d}{dx}\sqrt{20+x}=\frac{1}{2\sqrt{20+x}}=0.1$, that is two orders of magnitude smaller than the diverging one. Am I onto the right track? Is there some kind of theorem that states that the derivative has to be less than 1?

I know about Newton's method, a proven technique for finding the zeros to functions. I am curious about why using equations on the form ($x=\sqrt{x}$) converges and why using $x=x^2$ diverges.

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You are exactly right. There is a simple rule coming from chaos theory that tells you whether certain fixed points are sinks or sources for a function being iterated. Basically, suppose $f$ is some continuously differentiable function such that $f(x_0)=x_0$. If $|f'(x_0)|>1$ then $x_0$ is a source. If $|f'(x_0)|<1$ then $x_0$ is a sink. If $|f'(x_0)|=1$ then it can go either way.