remember that, if i'm right, and full blocks are indicating additional incremental demand due to currency crises, this is going to be a more regular thing. this is what we've theorized about for years. the network HAS to be ready if you want to Moon.
1MB isn't going to cut it. right now, unconf tx's are now up to 10000 with now >5TPS delays.
To be clear, I agree. Smoothly adjusting fees are another tool in the scaling toolbox, though, and should be ready for use as well. Where we're going, a 8 or 20x increase all by itself might not cut it. I'm eyeing a 500x price increase for the next bubble (peak, crashing afterward to 5-10x lower: ~$10-20K/BTC), which will mean a pretty big increase in transaction volume and may overrun even the 20MB blocks if we don't even have a fee market up yet.
We need as many scaling solutions in place as possible to enable the next bull run.
The nice thing about this debate is it's incentivizing them all. I'm confident we'll have the blocksize cap increase, hopefully in advance and not as a reaction to a stalled rally, but also a lot of other things. It's worth pushing against the small-blockers not because they have any real power to stop the increase, but because it lights a fire under them to do their part in making those optimizations to try to prove we can get by with smaller blocks. It's a futile effort on their part, but it ends up helping with large blocks, too.
Yes, it seems that increasing the blocksize limit is almost inevitable. No one can "centrally plan" bitcoin, at the end of the day anyone can run any software they want to interact with the network. It would be trivial for someone to branch off the source code using git, and release a version with Gavin's patch applied, or BIP 100, or some other change. Using git this version can easily track all the other developments, and all changes are well-defined and change history is cryptographically verified.
Since no one can apply top-down control over the network, we have to look at the incentives of the various participants. If miners, node operators, merchants, etc want larger blocks, then they would have an incentive to run software that allows a transition to larger blocks, and indicate that they are doing so.
The most overriding incentive is to stay in line with the network consensus. But if miners start mining blocks indicating that they implements BIP 100 or BIP 101, then network participants can indicate that they will accept larger blocks contingent on most others also accepting them.
In the longer term, it would also be good if this debate fosters a more diverse software ecosystem, which would allow other protocol changes to be decided by the market in this manner.