Quote from: ArticMine on November 25, 2016, 11:17:07 PM

Quote from: iamnotback on November 22, 2016, 08:17:52 PM

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Here is the rough draft from my white paper for the section concerning transactions fees, block size, and the unavoidable monopolization of Proof-of-Work by a few:

https://gist.github.com/shelby3/c0d6e0ed132be7e4577df3663c81ee09

Applies to every proof-of-work coin which attempts to scale up, not just Bitcoin.

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I edited it after proof-reading upon awakening.

I waited a few days before responding to this.

The analysis is the paper is correct, except for the where the POW coin has a tail or permanent block reward sufficient to secure the coin on its own. The notable cases with a tail or permanent block reward are Monero and Dogecoin. In the Monero case the net fees paid to the miners (fees less block increase penalties) could theoretically approach zero under the right circumstances, where there is a sharp decrease in the transaction volume. The obvious example would be on Christmas Day. The point in Monero is that fees are not there to secure the coin, that task is left to the block reward, but rather to regulate the blocksize and deter spam. I would expect gross fees, before any penalties are paid, in Monero to be about 2-3% of the block reward so we are dealing with the case where to quote from the paper

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the minted block reward is significantly greater than the average transaction fees per block

In this situation since the fees are insignificant and determined by the block reward and the variance in transaction demand, the financial incentives for a centralizing cartel over fees are simply not there.

Which my paper states very clearly, that is only true because you assume that transaction volume won't be significant enough such that transaction fees do not approach the minted block reward. You assume Monero will never handle any where near the world's volume of transactions and/or that the market cap will rise sufficiently such that the tiny perpetual minted block reward is greater than the transaction-related costs (but given the horrendous O(n²) scaling problem of Satoshi's design, then this assumption also isn't likely true at VISA scale).

But in any case none that can help, because as my paper states very clearly, proof-of-work remains a winner-take-all any way. Thus Monero's perpetual minted block reward does nothing to solve the problem.

The inevitable mining cartel (presuming Monero becomes economically relevant) will dictate transaction fees in Monero as well, and also control the mining and all the bad impacts (censorship, deanonymization, etc) that come with it.

Sorry. Better luck next time.