Quote from: Crowex on November 03, 2014, 04:27:49 PM

There would be a certain percentage of miners that would try and include any low fee paying transactions in their blocks (and maybe the community miners too, who want to provide this service) but for anybody with a reasonable share of the total hashing power it would definitely be against their long term self interest to move too far away from a cartel price (whether the cartel was natural or not) and I think that miners with a large share of hashing power would act according to these long term interests.

You could just as easily say that in the classic tragedy of the commons scenario, anyone with a reasonable number of cows would limit their grazing voluntarily because otherwise they'd be acting against their long term interest, so we don't have to worry about the tragedy of the commons. I think your argument fails for the same reason.

Quote from: Crowex on November 03, 2014, 04:27:49 PM

The market for digital products is similar in that once you have built the software for a computer game it doesnt cost you any more no matter how many games you produce. However we dont see the market price being driven down to the actual costs of production and below even though there is a willingness to pay a lower price.

This is a very dissimilar situation, because the game producer has a monopoly on the right to sell the game. If anyone off the street had a right to sell the game, you would see the price fall to almost zero.

Quote from: Taek on November 03, 2014, 05:47:37 PM

If permanent inflation ends up being required to encourage large amounts of hashing power, the heavy hitters will switch to a chain that has permanent inflation built in. If % fees on transactions end up being the most attractive choice, then the heavy hitters will switch to the chain that has % fees, because though they may not like the fee, they value the security and the heavy hitters will care enough to stomach the fees. If a really restrictive block size ends up being the correct choice... and so on. Sidechains could let all of these experiments happen on the Bitcoin currency directly.

Unfortunately, sidechains could probably not be used to switch to a cryptocurrency (ccy) with permanent inflation. The reason is that if a new ccy had permanent inflation, no holder of of that ccy could escape it, and everyone would be forced to pay for network security in proportion to their holdings. If you create a Bitcoin sidechain with permanent inflation, everyone has a choice as to whether to move their coins to that sidechain. So the only people paying for network security will be the people who choose to do so. You still have a free rider problem.

I saw "probably" above because there might be some clever solution where you'd make it extremely costly and difficult to move one's coins back from the sidechain to Bitcoin which somehow encourages everyone to just move their coins there and keep them there, or you might be able to come up with some crazy rules on the sidechain that I haven't thought of. But as far as I know, no one has proposed a viable way that sidechains could be used to solve the future network security problem.