<p dir="ltr"><br>
On May 30, 2015 10:38 PM, "Gavin Andresen" <<a href="mailto:gavinandresen@gmail.com">gavinandresen@gmail.com</a>> wrote:<br>
><br>
> Mining is a competitive business, the marginal miner will ALWAYS be going out of business.<br>
><br>
> That is completely independent of the block size, block subsidy, or transaction fees.</p>
<p dir="ltr">No, the later determines who can be profitable.<br>
Here's a thought experiment:</p>
<p dir="ltr">Subsidy is gone, all the block reward comes from fees.<br>
Miner A has great connectivity and mines 20 MB blocks, with an average of 20 btc per block.<br>
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.<br>
But the difficulty is the same for all and it can rise up to miner A breaking even after energy costs.<br>
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.</p>