[...]We don't want entirely decentralization and no centralization as that is just as bad as entirely centralization, e.g. see the
reply I made to ArticMine upthread and how 100% decentralized control over what goes in the block chain means a choice between unbounded spam or oligarchy control. Thus the problem is the lack of balance and Bitcoin flip flops either to too much decentralization forcing too much centralization (a Tragedy of the Commons)[...]
Here is that linked post:
The reason is that a fee market cannot properly develop in the absence of a block subsidy. One has either a fixed blocksize with a mining oligarchy and infinite fees or an infinite blocksize where competition between miners drive fees to zero.
For layman technophobes, your astute point (which many of us technophiles already aware of and I wrote
Spiraling Transactions Fees thread in 2013) is that when the block size is unlimited then anyone can include all the transactions that were excluded by a miner that was trying to force higher transaction fees. But if block size is unlimited then transaction spam can be unlimited, so a mining oligarchy must form to constrain block size. The problem is not due to relative block size (so compression wouldn't fix it), but due to the fact that someone centralized needs to decide which transactions are spam or not (otherwise in decentralization at least in Satoshi's design then all spam transactions are allowed).
[...]
My idea for fixing all of this, has to do with the way the temporal intrablock partitioning is done. I will probably find some flaw in my design too, but I will spend more time thinking about it.
Correction: my idea for temporal intrablock partitioning doesn't solve the problem above, but rather it makes block announcements a constant size (and enables instant transactions). The problem above remains and remains for Iota too in the sense that sending unlimited transactions is still an unbounded load on all the full nodes in the system. Remember that market based transaction fees are not a solution to the problem. My proposed solution (ditto for Iota) is again that every transaction has to include a PoW share. Since PoW is unprofitable (or if the PoW share provided is not computing a block solution), then this solution can be employed. However note it works much better in my (and also Iota's) design because in a Satoshi design it is possible your transaction won't get included in the current block so then you need to recompute your PoW share and resubmit your transaction. This is one of the details I was referring to. I think my design doesn't have that problem. Again I don't want to detail it entirely yet. I will get some rest now.
Those naive who are contemplating making their own copycoin lack exposure to level of unresolved problems in crypto land, and the intense level of arcane details they would have to become knowledgeable about.