That's an interesting line of reasoning.
It suggests that Bitcoin can only succeed if no such attackers exist.
Bitcoin can only succeed by growing larger than all attackers.
Maybe you and Peter Todd need to get in a room:
"Nifty paper proving what we knew already: w/o a blocksize limit there's no PoW security -> death of Bitcoin."
http://t.co/VPsgVkdzj9(
https://twitter.com/petertoddbtc/status/564934207487897601?s=03)
Since his tweet misrepresents what the paper says, it seems to me that he's irrationally entrenched in his opinion.
Yep. It is another downside of problems like this remaining unresolved for so long. As the debate continues people do become entrenched when they have have invested so much time and mental energy in their position. They have to admit to themselves that they wasted a lot of effort, if they reverse their view. This is further "cemented" once they go public and stake their reputation on an entrenched position. Peter did this with his video, and Mircea has done it on his blog in front of all his followers.
I have still not seen any reasonable argument why Bitcoin can't be allowed to scale at the rate of the
slowest improving computing technology that it uses: (bandwidth, at present).
From the abstract
We show that any situation with a fixed fee is equivalent to another situation with a limited block size.
And this is why bitcoin only allows free transactions for "priority" transactions (that are small), while everything else requires a fee. This by design ensures that there will be enough fees to support the network even if block sizes are limitless.
It is also why "priority" transactions are determined in BTC units. As the value of the network increases, fewer and fewer transaction qualify for free processing. To send a free transaction requires the equivalent of 1 BTC day (for example 2 BTC for 1/2 day or 0.5 BTC for 2 days). When BTC = $0.01 it was easy to qualify for free transactions and most were, but when BTC = $1000 very few transactions start to qualify. So by design more fees are generated as the value of bitcoin increases.
Satoshi thought this one through, and his design is holding up to the various academic attacks we are seeing.