On May 30, 2015 10:38 PM, "Gavin Andresen" <gavinandre...@gmail.com> wrote: > > Mining is a competitive business, the marginal miner will ALWAYS be going out of business. > > That is completely independent of the block size, block subsidy, or transaction fees.
No, the later determines who can be profitable. Here's a thought experiment: Subsidy is gone, all the block reward comes from fees. Miner A has great connectivity and mines 20 MB blocks, with an average of 20 btc per block. Miner B has a connectivity such that 2 MB blocks puts it on a reasonable orphan rate, so it gets an average of 2 btc per block mined. But the difficulty is the same for all and it can rise up to miner A breaking even after energy costs. Will miner B be profitable with this setup? The answer is no and miner B will just go out of business. In that sense too, bigger blocks mean more mining centralization.
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