Quote from: ciphermonk on March 10, 2013, 05:23:52 PM

If they don't do it already, miners need to start operating more like businesses. They need to crunch the number and understand the relationship between various transaction parameters and their cost. They need to do that for their own sake as they will need to host these transactions pretty much forever. They also need tools to tweak pricing quickly and dynamically as market forces change.

Under such assumptions, the current transaction dust we are experiencing should be reduced. My prediction is that if miners acted more as rational market players, they would require much higher fees for very small and young transactions. If the transaction is so small that it makes no economical sense to spend it, it should be priced accordingly. It will most likely be impossible to prune it and will require storage in UTXO memory. Some miners might also decide to drop them entirely. This is entirely up to them.

So how does the landscape look today? Are miners sufficiently empowered to dynamically change their pricing policies?

More of them would do this if it wasn't for the distorting effect of the block subsidy. Miners won't have a large incentive to optimize their transaction fee policies until fees are a significant portion of their revenue, which won't happen until the transaction rate starts to approach PayPal's.