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Your error is of course as I already stated, that transactions can grow unbounded due to market demand for more transactions, and since the Monero block size limit is bounded by the market demand as you have admitted, then it is unbounded.
Thus fees (not block reward) will trend towards 0 because no miner can enforce a bound on the block size so the miners will compete with each other to provide the lowest fees since there is no limit on the number of transactions a miner can put in a block (i.e. the payer can send a transaction with lower fees and wait some extra confirmations until the miner with lower fees wins the block).
But as I already stated, this means those miners with more hash rate will have higher income than those miners will less hashrate, yet all miners have the same verification costs. Thus mining will centralize to an oligarchy. Satoshi put a 1MB block size limit to keep verification costs much lower than the block reward, so that Bitcoin would not centralize too quickly.
I rest my case. Monero has not prevented the Tragedy of the Commons. Please don't make me explain it again.
Your error is of course as I already stated, that transactions can grow unbounded due to market demand for more transactions, and since the Monero block size limit is bounded by the market demand as you have admitted, then it is unbounded.
Thus fees (not block reward) will trend towards 0 because no miner can enforce a bound on the block size so the miners will compete with each other to provide the lowest fees since there is no limit on the number of transactions a miner can put in a block (i.e. the payer can send a transaction with lower fees and wait some extra confirmations until the miner with lower fees wins the block).
But as I already stated, this means those miners with more hash rate will have higher income than those miners will less hashrate, yet all miners have the same verification costs. Thus mining will centralize to an oligarchy. Satoshi put a 1MB block size limit to keep verification costs much lower than the block reward, so that Bitcoin would not centralize too quickly.
I rest my case. Monero has not prevented the Tragedy of the Commons. Please don't make me explain it again.
Actually the error is on your side since you expect a rational miner to pay a penalty in order to add a transaction to a block with a minimal or zero fees which are far less than the penalty. Please do not make me explain the basics of how Cryptonote works again.
I rest my case. Monero has prevented the Tragedy of the Commons.
My logic has nothing to do with the miner paying a penalty.
Per the math I replied to, the Monero penalty is based on exceeding the median of recent N blocks. Since (as you claim, but see Edit below) that median will scale over time to match the market demand for transactions thus no penalty will be incurred for adding all the transactions, then verification costs will eventually cost more than or a significant portion of the tail emission block reward as transaction volume scales. The point is there is no bound on transaction volume.
Thus the logic I stated takes over (where lower hashrate miners are unprofitable and centralization is forced economically):
But as I already stated, this means those miners with more hash rate will have higher income than those miners will less hashrate, yet all miners have the same verification costs. Thus mining will centralize to an oligarchy. Satoshi put a 1MB block size limit to keep verification costs much lower than the block reward, so that Bitcoin would not centralize too quickly.
Please check your logic more thoroughly before responding. Because you are incorrect. So find your error before posting please.
Edit: my point about transaction fees trending towards 0 is correct but not necessary for my argument as explained above. The reason txn fees trend to 0 despite Monero's penalty for creating blocks which exceed the median of recent N blocks is that payers can send the txns with the lowest fee that any miner will accept. Thus Monero's block size will trend to 0 if the penalty feature works as designed.
So either txn fees trend to 0 or block size trends to 0.
Sorry you can not defeat the fundamental fact that decentralization can't have a solution to the Byzantine Generals Problem. That is fundamental and inviolable. Waste years of your life, but you will still never defeat Physics and the fact that the speed-of-light isn't infinite.
Edit#2: you will probably think that payers will increase their txn fees so that their txn gets added to a block because miners aren't motivated to add too many transactions to incur the penalty (for miners that accept lower txn fees than the other miners which drive the median block size). But some of the txns will get added which have this lower txn fee, but payers can only be sure their txn is added timely if they pay the maximum txn fee that any miner requires (or some amount higher than the lowest fee), thus the miner may be able to afford to pay the penalty by including these extra transactions thus driving the median block size upwards over time and thus eventually driving the txn fees to 0 (the point is miners have no incentive to exclude txns with any level of txn fee when it doesn't cost them anything to add a transaction to block thus the trend will be ever lower and lower txn fees ... the entire point of my rebuttal to your math is what your penalty algorithm does not reach equilibrium). Which was my point that the penalty feature of Monero will not work as intended. But if it does work, it will drive the block size to 0. There are many other scenarios but they all have failure modes (analysis by case enumeration is very piss poor methodology to do academic work, rather I have started from first principles to show abstractly that no decentralized solution to the BGP can possibly exist). So choose your poison because there is no way to escape the problem that verification MUST be centralized in order to solve the Byzantine Generals Problem.
This response starts with the correct assumption that decentralization alone can't have a solution to the Byzantine Generals Problem (the failure of proof of stake), and then proceeds to make little sense on the unrelated problem of scaling the blocksize in POW coins. The latter problem Monero solves. Keep in mind that an equilibrium between fees per block, base reward and blocksize without a collapse to zero or "infinite" fees, the problem Monero solves, does not by itself speak to the miner centralization issue.
Whether proof of work introduces enough external entropy into the system to solve Byzantine Generals Problem is far from clear because there are a host of centralizing and de-centralizing factors interacting with each other the majority of which have not been taken into consideration in the previous discussion.