Jeff Garzik says that the power to decide should be shifted from developers to the free market (And BIP100 is a step in this direction). Sound nice to me, but in bicoinland the free market
a) Doesn't exist.
b) Hard to create.
c) If created, it may not work.
What makes the free market work? Market forced do. Buyer is forced to pay for what he get and seller is forced to provide for this pay. Therefore both are forced to serve each other's needs in accordance to their's purchasing parity.
Why they are forced to it? Because they are free to say 'no pay - no deal'. The force of the market force is based on ability to exclude users. That is, on being able to throw away free-riders and therefore charge the rest. Want a ride? Pay or leave. Without it free market won't work.
Is bitcoin currently looks like it? Let's have a look at the major actors:
Users:
-bitcoin holders. Don't pay for holding. Heavily taxed instead (about 10%pa 'inflation tax'). No market force.
-bitcoin traders. Don't (have to) pay for transactions. No market force.
Providers:
-Miners. Live on 'tax', taken from bitcoin holders (fees are too small). No market forces.
-Nodes. Not paid by users. No market forces.
-Bitcoin developers. Not paid by users. No market forces.
What can we see here? Everybody is either not-paid-volunteer or not-paying-parasite. NOBODY is forced by market forces to do ANYTHING. Developers don't have to develop, nodes don't have to transmit transactions, miners don't have to include them. It's miracle that this multi-billion industry still manages to exist on such a shaky grounds. This miracle have been lasting for too long already and if we won't do something about it pretty soon, it will collapse. Or, even worse, will become supported by detailed state regulation, i.e. will turn into a regular fiat currency.
What should be done to introduce market forces into bitcoinland?
A lot. We would have to change incentives for ALL it's participants.
Technical parts (difficult).
a) Enable payments between all these 5 parties.
b) Enable enforcing of these payments (refuse services to those that won't pay).
This would require changes in bitcoin protocol, in wallet software etc etc.
Political parts (impossible).
a) Discriminate users. Impossible because it's blacklisting, it breaks fungibility.
b) Cancel the mining reward. Impossible because miners won't work for
free fee
and users wont pay 1.4$ per transaction (230$*25 / (7*60*10)).
c) Software developers must charge for their software. Impossible because opensource. You charge 100$, I fork, change one line and charge 10$. Making it closed source, obfuscated etc is impossible as well.
Some of these changes were possible to introduce at the times of Satoshi, when bitcoin was just a hobby, but now, when there are powerful interest groups around, the bitcoin would rather die than become a free-market-land.
tl;dr; Introducing the free market in bitcoinland is almost impossible, technically and especially politically.
EDIT:The same, a bit more short and (hopefully) clear:
Why market works?
Because customer pays. To get customer's money you have to do what customer want.
Such system doesn't work at bitcoin, because developers, nodes and miners work for us, but they are not paid by us.
-If developers develop not what we want, they won't lose our money. Because we are not paying them anyway.
-If nodes won't verify and transmit transactions, they won't lose our money. Because we are not paying them anyway.
-If miners won't include zero-fee-transactions, they won't lose our money. Because we can't stop paying them mining reward.
All of them don't have to care about us, their customers.
In short, market in bitcoinland doesn't work.
That's why we have the current crisis: market forces are absent and are replaced by political forces. Instead of working on satisfying customer needs, people work on blackmouthing and blackmailing each other.
