I mentioned earlier today upthread that I would elaborate on the weaknesses in my design.

First let me explain the meaning of the above quote. So each provider is also (potentially) a verification node in my design. I say potentially because it is also plausible that providers would pool their verification and do it only once instead each duplicating the cost of verification.

So the first point is that system wide verification costs increase as the number of providers increase (assuming they aren't all pooling their verification). And remember upthread I pointed out that the Tragedy of the Commons of mining (where those providers processing more transaction volume and thus earning more fees, but all providers required to verify all transactions from all providers, would cause a centralization of or oligarchy of providers to control transaction fees as is the case for full nodes in Bitcoin and Ethereum per my upthread explanations) would be avoided only if transaction verification costs (and thus fees) were insignificant compared to typical transaction values. So since we can't limit minimum transaction values (because for one reason is that it would need an ongoing centralized monitor of exchange prices), the next best proxy is to make sure the cost of the PoW submitted with each transaction is much greater than the transaction fees (or more accurately stated in the red text quoted above). So we should set the PoW share difficulty as high as can be tolerated by the computers of payers (users) which will signing transactions (and the delay they can tolerate to compute the PoW share). This also has the benefit of making the total PoW hashrate from payers larger, thus making it more difficult to 51% attack the coin.

If users elect too many providers (in the scenario wherein all do their own independent verification) then if the distribution of users on providers becomes too concentrated into a few of those too many providers, then it is possible for the transaction fees on the seldom used providers to become significant, which would further incentivize users to concentrate into a few providers. Nevertheless this seems to be self-regulating in that since users (payers) have no financial incentive to concentrate in a few providers to begin with (since mining is unprofitable so the variance on block rewards is mostly irrelevant), then the community can (even the default wallet client) can work to distribute transactions across the available providers that have been elected by other payers when the concentration in any one provider exceeds some threshold (say 5% of the network hashrate and other than that leave the number of providers elected a free market function).

Note also that block chain storage costs (given the only regulation of spam are the PoW shares and any free market transaction fees but these should be insignificant relative to PoW per the above) could also be centralizing, i.e. providers might be economically incentivized to pool the storage and verification function. Nevertheless the decentralized, permissionless defense remains that users control the PoW and they can move their PoW at-will away from providers that are censoring or any other malfeasance.

So that is why I wrote upthread that my epiphany was that some centralization of mining is unavoidable but that the decentralized control can remain with the users, so in effect the system remains decentralized. The number of providers and the extent of pooling their verification and storage functions can anneal to the resilency requirements of the network (because for example if providers are DDoSed and unresponsive then users will switch to another provider).