Quote from: johnyj on January 12, 2016, 12:15:42 AM

Quote from: VeritasSapere on January 11, 2016, 11:58:41 PM

Quote from: johnyj on January 11, 2016, 11:53:53 PM

Quote from: VeritasSapere on January 11, 2016, 08:15:16 PM

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

As I explained HERE, as long as the blocks are not full, the fee income will always be a small percentage of the block reward, and it shrinks every 4 years. A reduced block reward + fee will make future miners only be able to mine a fraction of a bitcoin per each block (even fiat wise that means lots of money), greatly reduce the mining incentive, especially when most of the coins were mined

25-50 BTC per block fee is a much better incentive, and maybe the best incentive for the miners to continuously expand their operation, since it keeps every miner feels like an early adopter. But that is impossible to reach if we don't have block size limit

I think that you are wrong in this conception, It has been shown that we can have a fee market without a blocksize limit.

https://scalingbitcoin.org/papers/feemarket.pdf
http://www.bitcoinunlimited.info/1txn

Peter_R's paper made the same mistake as mainstream economists that they tried to use a simple formula to describe the complex real world that have millions of different actors, thus lost focus on the most important aspects. The supply and demand curve in his paper are all different for different miners since their cost structure are different

If there is no block size limit, when facing a rising orphan rate (e.g. large number of transactions), a miner's best approach is not to raise the fee, because that will make his node receive less and less transactions in a free block relay market, he would just move to large data centers to benefit from increased performance, thus he can use a low fee to attract more transactions, and this is exactly the centralization we don't want to see

I'm not so sure about this.

I think even if miners have different cost curves, it seems that it doesn't matter.

According to the paper:

Quote

an unhealthy fee market requires a propagation time that grows asymptotically with block size slower than log 𝑄. Using physical arguments, we can show that this is not possible.