All it takes for transaction fees to go down to ~zero is a benevolent or a malevolent miner occasionally accepting 0 fee transactions.
One miner accepts 0 fee transactions. Why would the other follow their example?
If "enough" (1 large or many small) miners are willing to fill 20 MB blocks of ~0 fee transactions, then some bitcoin users will send ~0 fee transactions, and some miners that mine for transaction fees will stop mining, which weakens the security of the bitcoin network.
This is dumb. Let us say one miner starts filling 20MB blocks with 0-fee transactions. Let's say that there are users out there who supply her with 0-fee transactions. Miners who are mining for fees will just ignore the 0-fee transactions, which means people who do 0-fee transactions just have to wait until the one miner who accepts them happens to get a block.
That means that the user has a choice between an 0-fee transaction that may or may not eventually get onto the blockchain at some unknown time in the distant future, or a fees-paid transaction that will get into the next block. So, fees-paid transactions will keep happening because people don't want the uncertainty, delay, and hassle of wondering whether and when their tx will go through.
But it gets better. That miner who is filling giant blocks with 0-fee transactions? She's competing with miners who are collecting fees. In that competition she will go broke. So to the extent a miner can cause a problem by the behavior you describe, it's a self-correcting problem.
There are more logic faults in their post.
(Numbers made up.)
After the fork, the government could regularly post blocks with a million transactions in it.
Any entity that finds a block could fill it with the transactions they want to include. That includes the government.
If it happened regularly enough, people would lower their transaction fees, and some profit-seeking miners would leave.
Two non sequitors. Why would people lower their transaction fees? And why would it make some miners (I assume all miners seek profit) leave?
They can try to do the same thing before the fork, but each time they are limited to posting blocks with only 100 transactions in it. There's still scarcity, and fewer miners will leave.
Again a non sequitor. Why would miners leave if another miner is filling blocks with 0 fee transaction? Average block size at the moment is (well) under half a megabyte. Blocks are not even half full on average. How is that scarcity?
Granted, scarcity is not driving mining at this time. But transaction fees were "supposed to" take over mining bounties (which I think is bad design, see below).
Profit is driving mining at this time. I don't see that changing anytime soon.
I still don't get how you go from “Miners are mining at a loss” to “This is proof of stake”.
There are four groups of people (a) stakeholders, (b) saboteurs, (c) transactors, and (d) miners.
Care to elaborate on how you came to these groups? They are definitely not mutually exclusive.
With PoW, stakeholders want to protect their coins from saboteurs, and for some reason transactors pay miners to do so. That's pretty convoluted! Transactors and miners would be just as happy destroying the blockchain, if it enriched them somehow. (We've seen attack vectors along these lines.)
That's not why people pay a transaction fee. Transaction fees are paid to verify a transaction. That's what it's all about, isn't it? Trustlessly verifying transactions. The transaction fee is supposed to be an incentive for a third party to verify a transaction.
However, if block size is increased, there's really no reason why most miners won't include as many transactions as possible, since it doesn't really cost them anything.
It will cost them in bandwidth, storage space, propagation speed (chance of orphans?). Miners will find a balance that optimizes their profit.
Transactors will no longer be required to pay to have their transactions included in the blockchain,
There is no requirement to pay transaction fees right now.
and eventually profit-seeking miners will leave.
Non sequitor. It doesn't happen now, at least explain why would it happen tomorrow?
Stakeholders will still need to protect their coins from saboteurs. Suddenly, stakeholders will either have to mine themselves, or send bitcoin to themselves with large fees, in order to keep miners in the game (which is inefficient, because sometimes the fees will go to saboteurs). In this scenario, we've realigned the costs of maintaining the integrity of the blockchain: the transaction fees have dropped, and stakeholders are paying to protect their coins. These are the same incentives as PoS.
What if scenario filled with assumptions. Can't be bothered to disseminate this further.
However, this is a really inefficient way of determining which ledger is correct.
It seems to be working quite well at the moment.
There are at least two ways to do so:
(1) You can ask the stakeholders and the saboteurs to fight it out. The last one standing decides which ledger is correct. This is PoW.
(2) You can just ask the stakeholders which ledger is correct. This is PoS.
And the stakeholders will include saboteurs who will confidently tell you their ledger is correct... And the one that managed to get the largest stake gets to decide. The way you put it actually convinced me that it is a good thing to separate the people making transactions / holding an amount of currency and the people verifying their transactions.
Thoughts?
TL;DR:
The same thing we do every night, Pinky.
