Theoretically valid, but I think it unlikely that the cumulative fee volume will vary by enough each block to make a part time approach attractive.  The miner also has to be worried about their overhead costs (costs incurred even when not mining), Moors law will gradually make any piece of hardware obsolete so it may be uneconomical to mine in a part time fashion even if one is capturing higher then normal fees on the blocks one tries for.

It is possible that even if part-time mining occurs that the effect may simply be a kind of network wide 'Drinking Bird' effect.  Mining pools basically all wait until fee accumulation reaches some threshold before mining begins en mass.  Different cost structures would lead miners into pools based on their electricity costs, low cost pools would begin mining earlier at a lower reward then higher electricity cost pools which would turn on only as rewards pass their desired threshold, the pool would essentially provide the on/off signal to all it's clients to maximize their efficiency.  The overall effect is that hashing ramps up each block but at a rate proportional to transaction fee accumulation, and then crashes after block completion.  If this ends up forcing more fees from users or not I'm not sure.

http://en.wikipedia.org/wiki/Drinking_bird

For further analysis I would examine the Fee per block history and see what the variance is, dose it look high enough to effect miners incentives, has the variance been growing or shrinking over time so that an extrapolation out to the 2030 time frame what would we expect it to be.

Amazing, Larry Summers has basically endorsed the principle behind Freicoin.  Though they don't use the terminology it's basically demurrage that's being discussed.  Naturally from a centralized point as with current FED which is different from FRC, but the basic idea that Interest rates SHOULD be negative is a huge statement and a HUGE break with orthodoxy.

People easily fall into the trap of believing that which enriches them is 'good', history should teach us very very suspicious of that feeling because it is usually our greed clouding our reasoning.

The comparison to Electronics is as inaccurate as it is self-serving, BTC's are not getting any better at the rate of Moor's law, their is no Billion dollar a year investment by thousands of skilled people and investment in newer chip fabrication that produce Moor's law growth in real utility and measurable physical performance.  All we have here is a speculative bubble and a kind of pyramid scheme where early adopters sell to new people at the bottom of the pyramid who's only ultimate goal is to sell to some bigger fool down the line.

BTC/LTC have Exactly the same economic model so no one should be the least surprised that they can both undergo the same kind of speculative bubbles.  Ultimately they will either both fail or both succeed on the validity of that economic model, I feel that model is basically a pyramid scheme and will fail but I see no reason BTC users can direct so much blind hate at LTC and think it is so different that they are not basically in the same boat.

Then he confuses the word 'invest' with 'gross revenue'.  But even that is being generous because miners are clearly not liquidating for coins at the rate they mine them, rather they are building huge unrealized-gains, likely beyond the ability of the market to ever make real.  The total USD depth on Gox is in the range of 25 million, so that would mean the BTC's mined in only the last WEEK would drain the whole system dry if liquidated at this value.

No, the ideal currency is one in which the holding of currency and the holding of real assets are equally desirable/profitable and currency can fulfill the role of being a medium of exchange with as little friction as possible.  This means currency can not accrue interest, or experience long term upward or downward trends in purchasing power, all of these things tip the scale.

Electricity, new Equipment or both?   Do you have ANY analysis to back up your number?  If we know roughly what kind of equipment is being used and what it's selling for then it should in principle be possible to calculate both electricity consumption and outlays for new hardware so I would very much like to see some analysis along those lines that can produce some estimates that are based in reality.

If you add a bot, have it direct people towards Freicoin, the only coin developed and lead by people who take the deflation problem seriously.  By the inclusion of a 5% per annum carrying cost (aka Demurrage) charge on all coins the incentive to hoard coins till the end of time is reduced and with it much of the irrational speculative frenzy which drives BTC prices ever upwards.

Glad to hear he gave Freicoin a shout out.

Oh how trite, my views differ from your views so I am a Communist!  In reality I am a Gesellian, an anti-communist AND anti-capitalist philosophy, but enough about me.

Your definition dug up off our modern wiki-fied internet merely crystallizes the misconception that has been around for 50 years that ALL the aspects of the American economy are integral parts of a single monolithic 'thing' called capitalism.  But this is a definition that destroys meaning and understanding by creating a kind of black-box from which we are told "all good things come".  This is no accident, your inability you understand the society we live is composed of MULTIPLE system which CAN mixed and matched without causing the whole thing to implode serves to keep you complacent and accepting of the present mix

The analogy might be something like a Aztec corn farmer believing that the society he lived in was one monolith of farming, tribal-warfare and human sacrifice.  If someone told him that human sacrifice was bad he would defend it on the grounds that it was part of the system to produce corn and corn was obviously necessary for sustenance.

We only need to look closely at your definition to see that it doesn't ever put it's finger on ONE thing to define capitalism.  It immediately jumps into the free-market and proceeds to define THAT (open competition, profit motive and private ownership of the means of production).  Then it tells us what Capitalism 'encourages' (and here it defines Laissez-faire without calling it such) and tells us the U.S. is capitalist which is about as close as it gets to providing a single concrete definition.  So basically your definition translates to "Capitalism is the sum of all the economic paradigms operating in the U.S. today".

Further more dose it seem a bit strange to you that in that whole melange of a definition theirs is NO REFERENCE to capitol itself?  If you know your economic jargon then you know capitol means MONEY, so we would really expect their to be some reference to money and how it is supposed to work in capitalism.  But your definition is devoid of any reference to the flow of money, banking and interest payments doesn't even seem to exist in your definition.  Why do you think such BIG parts of the system are not mentioned?  Could it be that the actual productive and useful parts of our economy like Free-Markets are pushed to the rhetorical forefront while the usury that's sucking the life out of it all behind the scenes tries to go as unnoticed as possible.  Can you see how the meaning of the word capitalism has been altered to exactly what you've dutifully regurgitated to me.  And how your knee-jerk reaction to throwing "communist" at anyone who questions the system serves the banking sector.

Seriously people keep expecting 'stability' like it's the second coming.  IF it was going to happen it would have happened already, the truth is that BTC was designed to do exactly what it's doing, be a hyper-deflationary quasi pyramid-scheme in which the early adopters see their net worth soar as new suckers come in at the bottom of the pyramid.

OP's lines look like they are hash-rates due to the rather smooth exponential look of them, some additional data may give them the more fine grained squiggles.  Hash rates ultimately have nothing to do with creating value (though some idiots think they do), thus I conclude OP's model is worthless.

Banks are not afraid of BTC because in it's current form it is an economic joke that will never actually perform the function of money in an economy.  And even if it DID, it dose nothing to address the root cause of Banking wealth, interest on debt.  A debt in BTC will still carry interest, so a BTC bank would function no different then a Dollar bank.  To undermine banking you need to eliminate urury and interest at it's source which is the hardness of money.  BTC was designed to be harder then real gold and if you know ANY economic history you know banks LOVED GOLD MONEY because it generates interest.  If BTC or something as hard as BTC were our money Banks would be enriched to a staggering degree, but you folks don't really care about that because in your hearts YOU lust to be the very banking class you claim to despise.

I've argued with Luke before on this obsession of his, your never going to go mainstream with something that dose not give people DURABLE identities.  Disposable identities are never going to fly in mainstream commerce where law enforcement must be conducted.  Also you have the grandmother factor at work here, a users needs a durable identity to give to other people and they can barely handle the technical hurdles of BTC as it is now.  This kind of secrecy and techno-elitist obsession will always fail.

It looks like it was #1 (Miners are mining differently), frankly I think it's a stupid idea too, it looks like people are raising a stink about it and it will be reverted shortly.

It was about time that someone realized the BTC 'dream' of it gobbling up all or most of the value in the world is EXACTLY the same 'theft' that Austrians claim the government commits when it inflates.  BTC hoarders all gleeful of the possibility that you will rob the rest of the world of it's wealth by debasement of it's currency.  The Freudian projection http://en.wikipedia.org/wiki/Psychological_projection is just amazing.

The way I see it their are three possible sources for the recent change.

1)  One or more of the large mining pools has changed how it mines recently
2)  The transactions mix has radically, changed such as a very high volume of 0 fee transactions being attempted recently
3)  The network communications have been disrupted in some way such that transactions are taking longer to reach miners

My naive guess is that the Chinese have 'discovered' that the transaction fee is optional and one of their trading sites/forums etc has caused a massive increase in 0 fee transactions being attempted.  If this is the case then they will probably only take a few more days of slowness for them to realize that the fee isn't so optional and they will cut it out.  If it's something else then it may be the new normal.

The Rat poison comment actually comes from Buffet's long term business partner in Berkshire Hathaway (who is like the Paul Allen to his Bill Gates).  Buffet seems to be more indifferent towards BTC then this partner person who seems actually hostile.

From the video it looks like the system has a few flaws, first is relies on a number of sub-systems (a DNS system, a user client, a merchant client, the Meat-space identity verifier etc etc) ALL of which are dependent on the others to function properly.  It would be hugely difficult to launch such a complete system in one lift.  Second the system as proposed doesn't even support credit cards so it's got little chance of being adopted by the mainstream retails. 

Third the delivery services are intended to be the only ones holding shipping addresses, this is untenable because your location IS relevant to the merchant most of the time.  At the very least they need to know how much to charge for the delivery and very often they are not going to be willing or legally able to conduct business across borders.  It also presents the single largest hurdle in adoption because of the Fed-Ex & UPS Duopoly in shipping at least one of these MAMMOTH companies must integrate this system into their operation for this Keyhotee to work at all.

Lastly the really BIG flaw I see is that their is no revenue stream to allow a company to do the massive customer-support, coding and logistical challenge launching all the systems would be.  Much like Linux, it can be 'free' in one sense but a business model still needs to exist to roll something out, geeks may program for free but they don't do tech support for free.

I'm sick and tired of people talking about how great Capitalism is when you don't have a clue what it IS.

Capitalism is an economic system based on borrowing money from BANKS at INTEREST to finance investment activity, and more recently consumer spending.  THAT IS ALL

It is NOT Entrepreneurship
It is NOT Free-Markets
It is NOT Industrialism

Yes in America we have all four and people have mashed all of them together in their minds into a kind of Monolith which is above reproach.  But if you dice it out, you'll see that the benefits have all come from the latter Three causes, while Capitalism has essentially been a parasitic activity siphoning off some of the wealth production from the others.