By the way, I'm seeing rising interest of a flex cap which only raises the block size when fee collected in each block is higher than block reward
interesting idea. but to up the 1MB limit, we need fees at ~0.0125BTC ( ~2.5$ ) if you assume 2000tx (~1MB worth) per block.
that a pretty high fee! so much for "virtual free transactions."
and at that point a shit load of TX wouldnt happen on the network, this method would very quickly make bitcoin no able to handle micropayments.
maybe if fee where >1BTC the limit would be pushed up would be more reasonable.
Ok then maybe 0.1 block reward is better. Block reward will cut by half next year, so eventually fee will rise pass block reward, it is just a matter of time.
Another concern: Block reward halving every 4 years is very drastic. When the block reward get enough small, more and more miners will be shut down, since it does not give miners enough incentive to mine when majority of coins were mined
Since early days of mining, many miners were incentivized to acquire a big enough pie of the total coin supply: "If I get hold of xxx% of the total money supply, then one day if bitcoin economy grow to xxxxx trillion dollar, I will have xxx% of this whole economy". But after mining reward cut by half several times, this incentive will not hold, so it is important to have decent fee income to keep the miners on board. I guess at 6.25 btc block reward the fee could be getting close to block reward