Quote from: gglon on October 18, 2014, 10:33:26 AM

From miner perspective, in the short run, it is most profitable to include tx with fee that is grater than penalty from broadcasting this transaction. As I understand, as soon as block O(1) propagation is included this penalty is greatly reduced and amounts to almost 0. Therefore if miner is greedy it is best to include almost all transactions with non-zero fee as soon as possible. This however will destroy fee market -> fees will collapse to 0. This is not free market.

No, this is free market. Here, an innovation has increased the efficiency of mining and this is communicated to the customer via the price system. All exchanges involved are voluntary.