I haven't been able to find information on this yet, so below I'm assuming miners don't do this.

Say the most recent block is solved and miner Bob finds out about it at t=0. Bob already has a pool of transactions to start hashing on. However, Bob could wait for transactions with higher tx fees to show up. If he does this, his probability of finding a block will be lower (having less time to mine), but wouldn't his potential payout be higher? If so, wouldn't there be an optimal time that Bob should wait to maximize his overall revenue? What strategy should Bob use to determine his optimal wait time?

Say Bob and Bill have similar hash rates, but Bob uses this strategy and Bill doesn't. Bob ends up using less electricity than Bill, so not only is Bob's revenue higher, Bob's profit margin should also be higher, no?

Taking this train of thought further, say Jill has twice Bob and Bill's hashing power. Will Jill's optimal wait time be longer than Bob's? In other words, if Jill can afford to wait even longer than Bob can, her payout will be even higher than Bob's. That's good news for her, especially since her electricity costs are also higher.

If every miner adopts Bob's waiting strategy, what effect would this have on confirmation times? For example, Jill will end up with transactions in her block that wouldn't be there if she didn't wait. Therefore, if Jill manages to solve her block, it will contain higher valued transactions that confirmed in a time significantly less than 10 minutes. If Bob solves his block, his set of transactions should be older than Jill's, but the tx fees in them will also be lower. Would this lead to tx fees becoming strongly correlated with confirmation times?

[tl;dr I argue we should keep the blocksize where it is: the market will respond by pricing transaction times, which is a feature we could all use!]

I posted this over at r/bitcoin, but I'd like to see more discussion on the topic here.

Right now, the cost of a transaction is arbitrary: you can pay the "recommended fee", a smaller fee, or no fee. Regardless, there's no reliable way of knowing when your transaction will be confirmed. In other words, the market has not yet been able to price confirmation times. I believe this is directly related to the blocksize issue, and that keeping the blocksize where it is should force the market to price transaction times. I would like to know if this reasoning makes sense:

The blocksize provides an artificial scarcity that will eventually force miners to prioritize based on transaction fees. However, slower miners know they can't compete with faster miners for the highest fees. Instead of simply shutting off their machines, a (rational) slower miner should instead optimize for a range of smaller fees that they have a reasonable chance of capturing (using their cheaper equipment). As a consequence, slower miners could stay in business, competing with each other in order to provide value for those who choose to pay less for longer wait times, based on the individual consumer or business' time preference. Competition at all tx price levels would result in a stable tx price as a function of tx time. Raising the limit will postpone the pricing of transaction times until the next limit is reached. Removing the limit entirely will prevent this state from being realized, and we will never know how long it should take to get a tx confirmed.

No other system of exchange has priced transaction times, so it's yet another feature bitcoin would have that others don't. What's more, we would get this feature for free, without having to do a hard fork. Please correct me if my reasoning is flawed or if I've missed some crucial aspect of the protocol that makes this impossible.

tl;dr I argue we should keep the blocksize where it is: the market will respond by pricing transaction times, which is a feature we could all use!

First time posting, by the way. Here's an idea I've been batting around over on reddit, and I'd like get some expert opinions on it:

http://www.reddit.com/r/Bitcoin/comments/hf8cj/can_virtual_goods_be_packaged_into_bitcoins_or_do/

If bitcoins are gaining in value, how do we get things like music or video game art assets to appreciate too?
Would we need a new network of ArtCoins to do this? Or would we just clone something like the GLBSE and trade art instead of assets?

Here's how I'm hoping this would work:
A band like Radiohead could "release" their next song by posting it as the genesis block on the market (for a price that they choose). This "original" print can then be transferred from one owner to the next just as bitcoins are (or any original work of art). The only difference would be that the person who buys it would be able to spawn subsequent generations of the song: ideally, the protocol should insure that exactly two copies exist for the second print, while the third print has four copies, etc. This way the buyer of the original work can sell two second prints for half the price of his original, while he keeps his original to sell later at a higher price. The number of "legit" copies expands geometrically at lower and lower prices until it is basically free (we might call this the torrenting limit). If someone wants to buy a copy, they can choose the price they think it is worth. Fans will want to buy earlier generations, while others can buy later generations for a reduced price.

Addendum:
*There is a monetary incentive to buy early, because the costs can be immediately recouped by spawning and reselling.
*The author's PGP keys would have to be included in the genesis block to verify that the chain started from them.
*The author controls the price of the original work, but they also control the supply. They may want to sell 100 originals for 100 BTC each. However, whether they release more originals is a business decision, since they don't want them to depreciate.
*Video games could be built off of a network of art assets. This might reduce the redundancy of common assets, such as furniture, across different developers.

So, do you think authors/musicians/artists would adopt this?