Meni

Thanks for this interesting comment.  I guess you are correct that the amortised cost of hashing blocks has nothing to do with the data size.  However as you say, knowing the value for the user is difficult.  I am not sure of the value of bitcoins sent is a good proxy, because of additional layers like colored coins and who is to say that a transaction for one person buying medical care has less value to the other than a millionaire pointlessly moving money between wallets?  Why not assume all transactions are equal?  The number of transactions may be the best proxy.

Therefore I would alter my “transaction fee targeting”, mentioned https://bitcointalk.org/index.php?topic=813324.msg9208935#msg9208935 to be the following:

I propose the following rule to determine the number of transactions in a block limit, once the block reward is low
The number of transactions in a block limit would increase (or decrease), by X%, if total transaction fees in the last N blocks is Y Bitcoin or more (or less).  

For example, if in the last 100,000 blocks, the average transaction fee per block is greater than 1 BTC, then the system increases the maximum number of transactions allowed in a block.

Advantages of this methodology include:
•   The system ensures sufficient fees are paid to secure the network in a direct way, with minimal changes to the protocol
•   If 1 BTC per block was chosen, this would represent c0.25% of the market capitalization being spent on security a year
•   This algorithm would be relatively simple
•   The transaction per block limit is determined algorithmically from historic blockchain data and therefore there will be a high level of agreement and little scope for attack
•   It would be difficult and expensive to manipulate this data, especially if mining is competitive and decentralized
•   The limit would relate well to demand for Bitcoin usage and real demand based on transaction fees, not just volume