Quote from: misterbigg on February 26, 2013, 02:06:14 AM

Quote from: Mashuri on February 26, 2013, 01:44:54 AM

If you disagree with his explanation, can you refute it specifically?

Of course I can, and this has been explained MULTIPLE times. Miners want to maximize their revenue. Users want to minimize their fees. If miners always include every transaction regardless of fees, there's no incentive for users to pay fees. The only way for a market for fees to emerge is if there is competition for transactions in a block. That means that miners have to leave some transactions out. But which transactions should they drop? Obviously...the ones with the lowest fees per kilobyte. Or to put in other terms, a market for fees can only emerge when block size is limited.

I strongly disagree with this, as limited block size is not the only limitation in the system.

I agree that miners want to earn fees and users want to pay as few fees as possible. Miners however in your (limited block size scenario) not only can leave transactions out of blocks, they have to leave them. Even if there are more transactions out there that the miner would like to include, he has to choose as subset of the available ones.

Even if miners only can ignore transactions, they will do so - including more transactions means slower block propagation times and as already said in a different thread, bandwidth is still a limiting factor in an unlimited/virtually unlimited block size scenario. People are getting worried that miners might start to inflate blocks to drive other miners out of the network. Still having a bunch of miners that can only send blocks with a 100% used 10 GBit link between them would just mean they'd have the longest chain but nobody can use it, as it is not accessible to anyone outside any more (sending data out of the mining network would mean the miner gets driven out of business by his colleagues that have no more need for him). I'd like to call it the miner circlejerk scenario.

Anyways, since larger blocks = higher risk for orphans = fees need to be higher to migitate that risk (e.g. 5% orphan risk = needs 5% more fees than needed with 0% orphan rate), miners still can and will create a market for fees, even with (practically) limitless blocks.