For example, for a block to be valid, no more than half of the transactions in the block can have fees below the average fee for that block. So, if 10 transactions have a fee of 1BTC and 10 more have a fee of 0.5BTC the average is 0.75. Now half the fees are already below this so an additional transaction with a 0.5BTC fee cannot be accepted, but a 0.8BTC fee is okay.
This forces clients to compete with each other for the current block, eliminates the need for a fixed block size (ie. fixes the spam problem) and scales to accommodate any number of transactions. If a spammer sends lots of small-to-zero fee transactions, only some of them, if any, will be accepted, because you can only include max 50% fees which are below the average. To include more smaller fees a generator will have to include more larger fees.
Think about it, clients will compete and a stable market rate for fees will be established. Tiny fees, too far below the market rate will not be accepted soon and fees above the market rate will be guaranteed to be accepted in the current block. It's a simple protocol rule for generators which should be computationally cheap.
Do you guys get this? Perhaps I haven't thought it through enough, it's just a proof of concept; the exact details can be refined. Does anyone have a reason that this can't work? Maybe it's just a really crap idea, but I would appreciate SOME feedback, please.
I'm very hesitant to support a protocol change that puts any sort of restriction at all on what a miner must put into a block or leave out. That can and should be something which is decided by the miner itself. Also, it is possible that the miner node itself can put in all sorts of bogus transactions to fiddle with this sort of arrangement anyway, and that just adds overhead as well as wasted data storage when miners have to deliberately make stuff up to get some fees. A miner could include a whole bunch of transactions that would "lower" the average TX fee allowing the miner to include some additional "real" fees, if any.
Still, it is an interesting way to set up an algorithm that also puts some emphasis on transaction fees. I'm sure people who have dedicated miners would love this. You could also say that blocks of a certain size (current max size or perhaps a bit less) could include more "free" or "cheap" transactions or simply follow the current rules. There is much to be said about this concept. I wonder if there is a way to "fix" these problems?