The bigger block, the longer the time is required to process
it, and the greater the the risk of orphaning.
What am I missing here?
All the of expensive operations can be done before a block is found, then they do not add any proportional time.
Correct.
Miners could agree to only solve blocks that the other miners are already expecting. This would mean that exactly zero information about the block contents would need to be transmitted at the time of block-solution announcement. This would eliminate any block-size dependent propagation risk.
1. By expensive operations, I assume you mean the validation of transactions.
The validation of transactions could be done by the miner solving the block, before a block is found, but the propagation of a large block across the network is another story.
Assuming a 1 MB/second speed, this seems like it would certainly become a factor when blocks get large, say 100 MB. 100 seconds
is surely significant (a factor of 16.6~% on a 600 second block interval).
2. Nodes validating the new block need to make sure they have all the transactions in the block and then compute the merkle tree (not sure how operationally expensive that is).
So are you sure "all" of the expensive operations can be done. Seems like this would contribute to delay and orphaning.
P.S. no hostility personally to gmax despite my opinions about the blocksize debate.