First I refer to both of your 2013 posts in which both the case of a fixed blocksize (with fees theoretically going to infinity, in practice they are bound by transferring the value of the coin to the miners) and an infinite blocksize (fees go to zero) both fail. I do not dispute either of those scenarios, in fact I have no problem giving you credit for them since you came up with them before I did.
You clarified and refined the explanation and conceptualization, or at least brought it to my attention again, which is why I credited (and thanked) you for focusing me on that again in my Decentralization thread.
You propose a tragedy of the commons on the premise that the block reward is dominated by fees. When I first read this response I stopped right at that point since a block reward dominated by fees is actually not possible in a Cryptonote Coin short of actually setting the fees in the consensus code. This I thought would be clear from my previous comments, but it appears this needs some clarification.
The reason the above two scenarios do not apply to a Cryptonote coin with a tail emission such a Monero becomes apparent when one considers the economics of the total block reward components of fees and base reward (new coin emission). If the total in fees per block significantly exceed the base reward then it becomes economically attractive for miners to burn coins to the penalty by mining larger blocks. The block size rises until the total fees per block fall below a level where it is uneconomic for the miners to pay the penalty by increasing the blocksize.
If I understand correctly that by "burn coins to the penalty", you mean that miners will create fake transactions to themselves? Thus the cost of the penalty is being charged to the miner who can't generate fees from himself.
But that is incorrect rationale, because your and my entire point has been that the
Tragedy of the Commons is due to market demand for scaling, then the block size is unbounded. Your (and my) entire point was that without any bound, then transaction fees would trend towards 0 and thus an oligarchy MUST form because verification is not only not free, but more saliently verification is less profitable any miner that has less hashrate than the other miner who has the most hashrate (since all miners have to verify the entire block chain and thus verification costs are the same for all full nodes and have to amortized over income from blocks).
Thus you've accomplished nothing in terms of the fact that verification will centralize.
I explained in this thread
starting from first principles as to why the abstract Byzantine Generals Problem can't be solved decentralized. Period!
Thus that guarantees that it doesn't matter how you try to obfuscate this reality in numerous technobabble. smooth is incorrect to question whether Bitcoin is directly correlated to the BGP. I could explain that too, but I grow weary of foruming.
This level is comparable to the base reward. It is at this point where the need for a tail emission becomes clear, since without the tail emission the total block reward (fee plus base reward) would go to zero.
The base reward not going to zero does nothing to solve the
Tragedy of the Commons, as explained innumerable times by me and reexplained again above.
The second claim is that a spam attack by a less that 50% subset of the miners is possible.
No I wrote what a 51% attacker could do to game theory Monero's penalty algorithm and I said otherwise if you make N too small in Monero's penalty algorithm, then a < 50% attacker can win more than N blocks with some probability.
As I explained I in the original post this is not possible since one has to either to purchase coins on the open market and pay them to other miners to burn them against the penalty or use hashpower to generate the coins and then burn them to the penalty.
Again you are not addressing that the
Tragedy of the Commons is due to market demand for scaling, not from the miner creating transactions to himself. Thus the rest of your logic is inapplicable.