1) Advantage of nodes with low latency. Nodes that can reach the rest of the network quickly have more blocks on the main chain and less orphans.
Answer: This is already going on in the current bitcoin protocol. We don't improve things, but our modification doesn't hurt either.
Actually it makes the problem significantly worse as more orphans leads to more opportunities for a larger miner to have an advantage over a smaller one through orphans.
Note the equations for P(Q,L) in the
paper I'm working on analyzing centralization incentives - they all depend on the block interval in such a way that a smaller block interval makes the larger hashing power more significant.
I suggest you correct your post.
Peter, I agree with you that there is a big problem with high orphan rates, but this is not a symptom of GHOST, but rather a symptom of high transaction rates.
Whether you use GHOST or Longest-chain at high rates you must either resort to large blocks that propagate slowly or to high block creation rates. There is no getting around that. Both cause a high orphan rate (or perhaps the right term to use is high rate of off-chain blocks). we do not pretend GHOST solves this problem The only thing we claim is that GHOST makes the protocol secure at high rates -- the 50% attack can no longer be executed with less than 50% of the hash rate.