Re: rpietila Wall Observer - the Quality TA Thread ;)

My take on the issue:

Any solution has to make spam expensive. Anything else is just adding further problems.
That's why I like the solution implemented with Litecoins.

Why does spam have to be expensive? if transactions are zero fee, then miners have no incentive to include them, so they'll just get filtered out and apply some mempool clearing system that forgets them after a certain time. If the transactions have a fee attached they are not really spam, so why not let supply and demand economics take care of the miners incentive?

Because the miners incentives are not aligned with those of the network in a free floating block size scenario

There is actually research indicating that this is not the case in the presence of a block reward. https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf (Thanks to binaryFate for letting me know about this article). Essentially the miners will not include spam unless the fee meets a certain threshold because it increases the probability of orphan blocks.

The article doesn't really disagree with what brg444 said above (I didn't read the entire chain of previous quotes). It says miners won't include arbitrarily much spam at an arbitrarily low price, because there will indeed be a functioning market where block space has a well-defined price. That is not the same as concluding that the resulting block size will be one that non-miner stakeholders (or anyone really) are happy with, much less that such a size is in some sense socially optimal.