*bump for more votes*

In my opinion, one of the goals of Bitcoin was that the network would be 'decentralized' and owned by 'everyone' and 'no one'.    However, it is very clear that there are two classes of people in the Bitcoin world.  Those who 'own the network' and those who 'pay to use the network'.    What I mean by this is that only miners profit directly from the operation of the network.  Everyone else pays the miners through inflation or fees.   Mining is now centralized to the point that 3 or 4 people could colude and control the majority of the hashing power.   These people own the network, everyone else pays to play.

It will always be the case (with Bitcoin) that specialization will tend make mining profitable only to a few and  benefit from economics of scale.  

Unfortunately, the cost of running / operating the network isn't entirely born by the miners.  Every user is providing bandwidth and mirroring services and these users are not reimbursed in any way.  Miners, because they are centralized, will tend to favor more centralization, larger blocks, etc until all aspects of the network grow beyond what can be truly decentralized.  

I contend that an ideal crypto-currency should allow everyone who owns it to profit from its use and that owning & mining should be equally profitable.   This would be accomplished by paying dividends to owners from 50% of the transaction fees.    From a capital perspective, owning such a crypto-currency would be just as profitable as mining such a crypto-currency.   Competition would drive the ROI of investing in ASIC/etc to the dividend rate and no lower because if given the choice between buying ASIC for $1M or buying $1M of the crypto-currency both would expect the same rate of return yet going the ASIC route is far more risky.    

The effect of a dividend-paying crypto-currency is that it would be even less inflationary that Bitcoin.  If you remove half of the inflation bitcoin has experienced then the total value of everyone's bitcoins would be almost 2x.  If there was profit to be made by holding Bitcoins then their value would be over 2x.

Bitcoin is all good and dandy the only issue is that you cannot use it as means of transfer on a personal, physical, day-to-day level efficiently, phones batteries do not last that long these days and phones are relatively expensive, e.g. you should "own" 400$ worth of assets to be able to spend 100$.

What seems to be most beneficial to the community at this stage is if a company would crowd fund a device with a modern, stylish and cheap design which is capable of transferring coins from Bob to Alice nearly instantly with a low chance of a double spent transaction.

The design would include dual processors, one almost always in sleep mode unless hashing is needed and the other one is there solely for the purpose to wake the first one up should the event fire, the battery would last say 30 days without recharging. All of this is possible with modern technology except for the limitations imposed by Bitcoin/the state inherently, such as police not willing to arrest the owners of fraudulent "miner" points which are likely to be needed to synchronize all the devices that are near.

I am curious as to what would be the best scheme for all of this to work together effectively?

Just wondering if there are many people from New Zealand that use this board. Specifically if anyone has used bitnz.com - it looks pretty legit but nervous about sending larger amounts of coins through it.

Also wondering how keen fellow kiwis would be about a group buy of USB miners? I personally do not have the credibility/reputation to start one of these pools but am interested if others have.

With the limitation of 7 transactions/second, 10 minute confirmation times, hour long deposits, and sometimes, transactions that take days, there is a big incentive to create ways to transact off the chain. With inputs.io and soon Open Transactions, it seems there has already been some movement in this direction.

It has been claimed that the block size limit will be increased sometime in the future. But there is already movement to get around the block chain altogether. If a new method of securing transactions can be instant, then the block chain becomes less attractive.

So if enough transactions go off chain, will there still be enough incentive to mine and secure the block chain? or will it lead to fewer transaction fees, fewer miners, less security......

And if the answer is no, that wouldn't happen, I'd be interested in hearing some thought on why, and what would happen if the answer were yes.