Re: What will keep transaction fees up?

It's not a tragedy of the commons because generators will have interest in seeing the network continue to function.

Just like the herders have an interest in having the common pasture continue to grow grass?

No, there will be instititutions with a high value to protect. Costs of protection are a 'tax' of sorts, but they are unavoidable. They are not a tragedy of the commons scenario, each is still looking out for his own interests, and his interests benefit others. It's a postitive externality.

I think db has a point. If the block reward isn't profitable, that does look like a tragedy of the commons. It's true that if it happens the least efficient miners will give up, what will decrease the difficulty for the most efficient... but a lower difficulty is bad for the network...

Which is why major institutions will still be willing to contribute clock-cycles at or just below a break even point. Because there are more forms of economic motivation than just profit. I'm really suprised that so many who seem so well educated on economic issues can't wrap their head around this simple concept. If you have something valuable to protect, have you ever paid the rental fee on a safety deposit box? The cost of the box rental is tiny compared to the value of the object within, but that's not a tragedy of the commons! People do it all the time! It's a cost of security, not a resource access issue! The tragedy of the commons parable is a limited resource issue!