Quote from: misterbigg on February 20, 2013, 11:45:36 PM

But it does, and I gave an example. The transition from FPGA/GPU to ASIC will cause the network hashing rate to skyrocket in a way that is totally unconnected to the value of Bitcoin or the amount collected in fees. This alone should tell you that the connection between hash rate and transaction scarcity is tenuous at best (non-existent at worst, as is the case currently). If we had this system in place now, it would cause the block size to grow despite the absence of scarcity, resulting in less miner revenue not more.

I hope that we can put to rest the idea that tying the block size to the network hash rate is a bad idea.

I don't think we can put it to rest quite yet. Remember that currently we have a fixed reward of 25 BTC per block for mining. If this reward was in place forever, block size scarcity in terms of miner incentive would be irrelevant. Well not completely, even with a fixed reward it would eventually be such a small part of the monetary base that it wouldn't be enough. But that would take a very long time.

The point is that if this system was in place, and the fixed reward was small, there would be no "ASIC boom 2". There would be no "massive investments in next gen ASIC". This is because there would be a super incentive to not have too much mining power. Not only would the difficulty increase massively, so would the block size, leading to less fees from the users. Justifying the investments in massive amounts of new mining would be quite impossible.

There could be a limit on how much the block size can grow in any adjustment (which is what MoonShadow proposed) to have some kind of compromise though.