misterbigg - interesting idea, and I agree with your stance but here are some problems.  While it seems intuitively clear that, “Hm, if transaction fees are 3% of total bitcoins transmitted, that’s too high, the potential block space needs to expand.”

Problem is, how do you measure the number of bitcoins transmitted?

Address A has 100BTC.  It sends 98BTC to address B and 1BTC to address C.  How many bitcoins were spent?

Probably 1, right?  That is the assumption the blockchaininfo site makes.  But maybe it’s actually sending 98.  Or none.  Or 99, to two separate parties.  So we can’t know the actual transfer amount.  We can assume the maximum.  But then that means anyone with a large balance which is fairly concentrated address-wise is going to skew that “fee %” statistic way down.  In the above transaction, you know that somewhere between 0 and 100BTC were transferred.  The fee was 1BTC.  Was the fee 100% or 1%?

This also opens it up to manipulation.  Someone could mine otherwise empty blocks with enormous looking fees... which, since they mined the block, they get back, costing them nothing.  They could then work to expand the block size for whatever nefarious reason.

So while I think the “fees as % of transfer” is a nice number to work with in theory, in practice it’s not really available.  If we want to maintain scarcity of transactions in the blockchain while still having a way to expand it, I think the (total fee) / (block reward) is a good metric because it scales with time and maintains miner incentive.  While in its simplistic form it is also somewhat open to manipulation, you could just have an average of 10 blocks or so, and if an attacker is publishing 10 blocks in a row you’ve got way bigger problems. (Also I don’t think a temporary block size increase attack in really that damaging... within reason, we can put up with occasional spam.  Hack, we’ve all got a gig of S.Dice gambling on our drives right now.)