Okay, to answer my own confused question: This is not a problem.
Transactions without any dust outputs, but with larger and smaller fees are still relayed over the network. Clients see those transactions that make it into the blockchain and adjust the definition of dust accordingly.
There is no chicken and egg problem because, in order to down-adjust the definition of dust, a client does not need to see a transaction with dusty outputs make it into the block chain. They merely need to see a tx with lower-than-average fees accepted into the blockchain. The force is undisturbed, and the satoshis flow freely.
Topic: Dynamic dust definition down-adjustment doubts (Read 444 times)
Alright, one last one for the newbie ghetto.
Gavin outlines here a plan to allow the network to dynamically adjust the minimum transaction fee by watching the transactions that are actually making it into blocks:
https://github.com/bitcoin/bitcoin/pull/2577#issuecomment-17138244
However, this raises a question. Were that to be implemented, imagine the following:
Bitcoins are becoming more valuable, and the cost of computing resources is falling.
Because of the above, miners are now willing to include transactions with lower fees in blocks.
However, because the network as a whole isn't relaying any transactions which meet the new criteria (because they haven't seen any get into a block yet) the miners don't see them, and thus they continue not to see any included in a block.
How would the network down-adjust the minimum transaction fee in this case?
Gavin outlines here a plan to allow the network to dynamically adjust the minimum transaction fee by watching the transactions that are actually making it into blocks:
https://github.com/bitcoin/bitcoin/pull/2577#issuecomment-17138244
However, this raises a question. Were that to be implemented, imagine the following:
Bitcoins are becoming more valuable, and the cost of computing resources is falling.
Because of the above, miners are now willing to include transactions with lower fees in blocks.
However, because the network as a whole isn't relaying any transactions which meet the new criteria (because they haven't seen any get into a block yet) the miners don't see them, and thus they continue not to see any included in a block.
How would the network down-adjust the minimum transaction fee in this case?
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