Likewise, if blockchain use was infinite in terms of transaction capacity & storage, why would anyone pay fees?
You do NOT need perma small blocks
I don't think there are people which are actually on a "1mb forevah" camp. This, obviously, doesn't scale. So no permasmall.
because Bitcoin doesn't function properly without a forced minimum transaction fee in the first place. Gmaxwell doesn't understand economics and is using the WRONG tool for the job. He's attempting to use block size as both a spam inhibitor and fee market promoter, when it's minimum transaction fee that's designed for both of those purposes. He's trying to alter the functionality of Bitcoin to be the opposite of how Satoshi created it:
"
If we started getting DoS attacked with loads of wasted transactions back and forth, you would need to start paying a 0.01 minimum transaction fee. 0.1.5 actually had an option to set that, but I took it out to reduce confusion. Free transactions are nice and we can keep it that way if people don't abuse them." - Satoshi
More on that subject here:
Minimum transaction fee is the anti-spam mechanism of Bitcoin, not block sizehttps://bitcointalk.org/index.php?topic=1295293.0In absence of serious antispamming fees, and in the presence of "willing-to-process-junk-for-free" miners, the block size is the ultimate safeguard for abuse.
Personally I have no problem with big blocks if minimum fees get higher and if the game theory, or code, or network, doesn't break somewhere else.