DECENTRALIZED crypto currency (including Bitcoin) is a delusion (any solutions?)

[Peachy]

Good discussion.  And what would drive those users to "want" to use that system?  Speaking personally: A reduction in the friction-costs of the existing system(s).

With existing fiat the merchant's customers usually pay with credit cards which means they (the merchant) have to absorb the 2-3% EMV fee (we can argue the number forever, but it's a cost the business must absorb) vs. the cash cost (whether you want to call this a cash discount or credit card surcharge don't bother until the supreme court decides that wording later this year).  Either way, its a friction cost for the merchants.  Likewise, so is the 30 day holding period before they can actually receive the funds for the goods sold.

With bitcoin (and frankly all other current crypto solutions) any debit card charges go across the very same EMV network and thus the merchant still incurs the 2-3% surcharge cost or that cost is passed to the user.  Someone has to pay it.  However, the 30 day waiting period is now eliminated and thus the utility of bitcoin debit cards vs. fiat credit cards does have value for them.

With our solution there is no need for the merchant or user to pay the 2-3% EMV and you can create your own debit card for yourself and for any friends/family you wish (equipment cost to crank them out is negligible).  The card you create will work on any and all existing merchant terminals, but without having to pay EMV and will clear the transaction in around 10 ~ 15 seconds.

This is not the only value-add the system will provide, but just one that clearly shows the improvement in real value vs. any existing project developed or proposed that would drive adoption.

What solution is that? Shakepay?

Nope.  They are using a "Visa" branded card.  See their current card fee structure per their website.  

Fees                           USD card        EUR card
Issuing a card                $ 15.00          € 15.00
Monthly fee                   $  1.00          €  1.00
Card loading                     1%               1%
Foreign currency conversion      3%               3%
Domestic ATM withdrawals      $  2.50          €  2.25
International ATM withdrawals $  3.50          €  2.75

See my tagline below for the only one capable of such a solution.

[Peachy]

The problem is that such a perfect currency would never catch on, because 95% of crypto is about speculation for "moon".  If you build a system that doesn't allow to dream about the moon, but is simply a good stable currency, nobody's going to "invest" in it, and it wouldn't take off.

It constantly boggles my mind why people never grasp the basic understanding of the 2 levers of value:  price and quantity.  

If I have a quantity 10 of something that is worth $1 then my total portfolio = $10.  

If I still have 10 of them and they are now worth $2/ea my portfolio = $20.  

Wouldn't it be the same situation if I had 20 of them still worth $1?  Isn't the ROI the same, but now has the added benefit of their utility being easier (psychologically) to spend since I'm not worried about the cost of my dinner doubling before the dessert arrives?

[iamnotback]

Let China and the IRS suffer the same fate as the Spanish did if they try to play Whack-A-Mole against a decentralized phenomenon:

Edit: the unstoppable power of leaderless organization:

http://www.starfishandspider.com/preview/index.html

Start on this page for the punch line:

http://www.starfishandspider.com/preview/16.html

[iamnotback]

dinofelis's posts are very articulate.  I don't think I could have stated it that well myself. Although I disagree with the effects of his idea to not adjust difficulty (which he also seems to allude to).

hv_ I think your point has merit and I relate to the Q factor and quiescence in dynamic systems.

Fuserleer there is no action of top-down interference with the bottom-up free market which doesn't have some unintended impacts. I wonder what those impacts would be for trying to smooth out volatility?

[iamnotback]

I have been following you for years with much interest, I post very little.  How to you plan to stablize the price of your coin?   I realize that the market will ultimatly decide the value of a coin but for mass adoption I believe you will need some measure of stability, even if it means a slow and steady increase in the value of your work.
  It seems most people will not 'mass adopt' unless there is some level of stability.

I visualize a mass adoption wherein the users are watching their balances grow continuously and thus they are not concerned about volatility because they are invested in the paradigm.

They are involved because they love the concept and what it provides for giving them more freedom to do various endeavors on the Internet. Do people use Facebook because the price might go up or down?

We can't successfully approach crypto-currency as a checking account. That will never happen. See my prior post about my bifurcation thesis.

Crypto-currency will serve a fledgling niche that can't be served by fiat. Why? Because fiat can't be spent globally in a millisecond to a microtransaction. There are billions of people who don't have a credit card or who wouldn't even hassle with entering their credit card number for some microtransactions. Onboarding is a key concept (millions or billions of them won't be buying the crypto-currency for these micropayments). The larger the ecosystem, the more demand for the crypto-currency, thus the price increases.

Thank you for all your inputs.  These are the differing ideas that I wanted to hear(who is correct only the future will tell).  Some very good points were brought up, my Idea of "mass adoption" equated to "mass use"...which was faulty.  I now have a better understanding of what crypto might achieve,

peace,
D

I was suffering a very bad GI infection when I wrote my prior posts, so I wasn't able to think or articulate well.

I think mass adoption is about enabling more software developers and users to find new ways of earning money and increasing their collective knowledge/experience (trading) that can't be done with the existing paradigms of payment systems and centralized databases.

The paradigm/system must be an open ecosystem and decentralized, analogous to the Internet itself.

And combining that with an onboarding mechanism that symbiotically drives it.

The blockchain technology must have certain performance and decentralization attributes in order to make this plausible. For example, we need sub-second transactions (both monetary and other blockchain events) and unbounded scalability.

Steem(it) had some of my ideas incorporated and I also gained some insight/ideas from that experiment. But I think some of the details of Steem are lacking.

Essentially I don't see crypto-currency's killer feature to replace what we already do with fiat paradigms. I rather see it opening up new capabilities that we can't do with existing fiat based, centralized systems. However, I am not intending to disparage any other project's differing strategy or perspective. Decentralized experimentation is good, per the Apache versus Spanish story I linked above.

We all know that essentially the only way to monetize these days is advertising. But advertising is only worth about at best $1 per CPM, thus less than $0.001 per page view.

An economy is about trade. There are billions of creative people out there who would feel a lot better about themselves if they were trading instead of being Facebook zombies (see quote below). The transition from the one-way media of TV to interactive media of the Internet was more engaging, decentralized, and thus more valuable to the viewers/users. But still the users are basically powerless in the economic system and configurations of the Internet, i.e. the economic system and configurations of the Internet is up to now still more of a one-way action analogous to the TV era. Let's disrupt that and create another revolution.

Essentially Google's business model has to die. And they know it. They are trying to diversify into products, but that is not the solution. The solution is disrupt Google.

More details about what I have in mind should hopefully be forthcoming. As much as possible I want the project to be adaptable to decentralized improvements, analogous to how HTTP sits on top of TCP/IP. I am designing a base protocol and the world has to innovate on top of it if I am correct. Also I need to adjust to feedback and learn as I proceed.

We need an initial kickstart feature to drive it.

Also what reasoning do you apply to put Hedonism in Cycle #6 and not #5?

Seems to me the hedonism will head for a peak as the Marxist crap heads for a peak in Cycle #5 because it is the Marxist crap that finances wide-scale hedonism.

Hedonism as a mechanism of mass control is not yet ready for prime time. Much like most of us are not yet ready to be knowledge workers. Both of these are coming but not quite yet. The links below highlight some of my thinking on the upcoming power of hedonism.

At war with World of Warcraft: an addict tells his story
https://www.theguardian.com/technology/2011/aug/29/world-of-warcraft-video-game-addict

At the height of his addiction Ryan van Cleave had little time for his real life. World of Warcraft, a video game, had crowded out everything: his wife and children, his job as a university English professor.

Living inside World of Warcraft (WoW) seemed preferable to the drudgery of everyday life... "Playing WoW makes me feel godlike," Van Cleave wrote. "I have ultimate control and can do what I want with few real repercussions. The real world makes me feel impotent

Kids turn violent as parents battle ‘digital heroin’ addiction
http://nypost.com/2016/12/17/kids-turn-violent-as-parents-battle-digital-heroin-addiction/

“He would refuse to do anything unless I would let him play his game,” she said. Barbara, who had discarded her TV 25 years ago, made the mistake of using the game as a bargaining tool.

When she tried to take his computer away, he attacked her “with a dazed look on his face — his eyes were not his.” She called the police. Shocked, they asked if the 9-year-old was on drugs.

Virtual reality is coming to sex, sports and Facebook
http://www.usatoday.com/story/tech/2015/03/27/virtual-reality-oculus-rift-facebook-vr-will-be-everywhere/70547882/

VR now is poised not only to challenge reality's stranglehold on the way we engage with life, but possibly even eclipse it for sheer thrills.

Gaming. Concerts. Family reunions. Sporting events. Even sex – all of it will be experienced in a hyper-real fashion and with a commonness that technologists predict will rival our incessant smartphone use today.

“'VR has been around for decades, but it will stick this time.'” - Todd Richmond, USC

Then there is the whole robot 'girlfriend' thing
http://www.mirror.co.uk/news/weird-news/first-interactive-robot-girlfriend-china-7800073

China has unveiled its first interactive robot - which can chat away to humans and even take orders from iCloud.

When the researcher says "hello" to the robot, she replies: "Yes, my lord, what can I do for you."
When asked to "please wave your hand" she does just that, much to the astonishment of those watching.
Her developers say she is programmed to match human facial expressions, body and mouth movements.

Hedonism will probably be the primary mechanism of social control but not quite yet its time is coming.  
The surveillance state by contrast is more or less ready to take off now.

First comes Orwell [surveillance state] then Huxley [the blue pill].

Ah I see you are employing the definition of hedonism to a wider scope than I was contemplating. I of course already concurred with the blue pill future:

https://steemit.com/society/@anonymint/the-red-pill-blue-pill-election-nyc-slumlord-vs-globalists

I was thinking of the peaking of sexual liberalism which seems to me is financed by socialism so I was thinking that as socialism peaked, sexual liberalism (e.g. feminism, rampant birth control, etc) would lose its financial support:



Are you sure that such control is that far into the future? Had you not heard on the recent Pokemon Go phenomenon?

http://www.dailymail.co.uk/news/article-3693814/Chaos-Central-Park-gamers-leap-cars-leave-engines-running-catch-rare-POKEMON.html

Internet addiction is another drug escape, and potentially capable of creating much more controllable zombies:

http://www.techaddiction.ca/internet_addiction_statistics.html
http://www.techaddiction.ca/video_game_addiction_statistics.html

[dinofelis]

The problem is that such a perfect currency would never catch on, because 95% of crypto is about speculation for "moon".  If you build a system that doesn't allow to dream about the moon, but is simply a good stable currency, nobody's going to "invest" in it, and it wouldn't take off.

It constantly boggles my mind why people never grasp the basic understanding of the 2 levers of value:  price and quantity.  

If I have a quantity 10 of something that is worth $1 then my total portfolio = $10.  

If I still have 10 of them and they are now worth $2/ea my portfolio = $20.  

Wouldn't it be the same situation if I had 20 of them still worth $1?  Isn't the ROI the same, but now has the added benefit of their utility being easier (psychologically) to spend since I'm not worried about the cost of my dinner doubling before the dessert arrives?

Ah, I saw the monetary creation from a PoW point of view, while you see it from a PoS point of view.  But this is somewhat strange, and at first sight, I wonder if such a system doesn't beg the question.

If I understand your premise, it goes as follows: given a crypto currency with a coin X, and we want to peg coin X's value to, say the dollar (let us assume for a moment that the dollar is a stable unit of value - which it more or less is in the short term), then if ever market forces push X over $1,- then enough new coins are minted such that its inflationary pressure lowers X back to $1,-.  If ever X gets below $1,-, then enough coins are burned so that the scarcity of X makes X back to $1,-.  

Your comments seem to point that these new coins, or those burned coins, are distributed according to stake.   Let us suppose that at a certain point, Joe has 20 X in his account, and Jack has 30 X in his account.  Suppose now that X rises in price, and the amount of X has to triple.  In perfect PoS distribution, this means that Joe now has 60 X in his account, and Jack has 90 X in his account.  The next day, X crashes on the market, and the number of X has to be divided by 5 and burned to maintain the price.  Joe now has 12 X in his account, and Jack has 18 X in his account.

All the time, X is near $1,- but Joe first had $20, then it rose to $60, and then it fell to $12.

In what way is this different from not changing the amount of X at all ?

Suppose that Jack had to pay Joe something that was worth $10.  Each time, Jack will have to pay Joe 10 X.  
If this happened first, then Joe would end up with 30 X and Jack with 20 X.    This would then rise to 90 X resp. 60 X, to fall back to 18 X resp 12 X.  If it happened second, Joe would have 70 X and Jack would have 80 X, to fall back to 14 X and 16 X respectively.  And if it happened at the end, Joe would have 22 X and Jack 8 X.

So depending on where it happened, at the end of the day, Joe would hold ($18 resp. $14, resp. $22), and Jack would hold ($12 resp $16 resp $8).

Consider now a coin, Y, that is like X, but doesn't do this adjustment.  Initially, Joe has 20 Y and Jack has 30 Y.  At first, Y is at $1, then it rises to $3, and then it falls to $0.6.
This means that Joe initially had $20, then he had $60 and in the end he had $12 worth in his account: EXACTLY as with X.

Suppose now that Jack has to pay Joe something worth $10.  If it happens first, Joe will get 10 Y from Jack, and he will  have hence 30 Y and Jack will have 20 Y.  At the end of the day, Joe will have then $18, and Jack $12.

If the payment happens second, Jack will have to pay Joe 3.33Y ($10 at $3 per Y).  Joe will now hold 23.33Y and Jack will hold 26.66Y.  At the end of the day, Joe will have $14 (23.33 Y at $0.6), and Jack will have $16 (26.66 at $0.6).  If the payment happened at the end, Jack will have to pay Joe 16.66Y so Joe would hold 36.66 Y and Jack would hold 13.33 Y, so Joe has $22 worth of Y, and Jack, $8.

As we see, the value that people hold is exactly the same for coin X, and coin Y.  There's no point in doing this inflation and deflation: a coin that doesn't do it, has exactly the same effect.

What one actually does, with this inflationary game, is simply to change the measurement unit.  But there's no stability at all in held sums.  If you have an account containing a value of $200, initially, this fluctuates just as much in X than in Y.   There's no monetary point in trying to peg the unit.

[hyc]

An economy is about trade. There are billions of creative people out there who would feel a lot better about themselves if they were trading instead of being Facebook zombies (see quote below). The transition from the one-way media of TV to interactive media of the Internet was more engaging, decentralized, and thus more valuable to the viewers/users. But still the users are basically powerless in the economic system and configurations of the Internet, i.e. the economic system and configurations of the Internet is up to now still more of a one-way action analogous to the TV era. Let's disrupt that and create another revolution.

Essentially Google's business model has to die. And they know it. They are trying to diversify into products, but that is not the solution. The solution is disrupt Google.

More details about what I have in mind should hopefully be forthcoming. As much as possible I want the project to be adaptable to decentralized improvements, analogous to how HTTP sits on top of TCP/IP. I am designing a base protocol and the world has to innovate on top of it if I am correct. Also I need to adjust to feedback and learn as I proceed.

We need an initial kickstart feature to drive it.

Interactivity of the Internet had great potential but it has been stifled by The Establishment. Asymmetric internet service, with upload speeds much slower than download speeds, precludes a truly interactive internet. It keeps end-users firmly locked into the role of consumers instead of allowing true peer-to-peer creation and interaction. We need to break this stranglehold before the Internet's full potential can be unleashed.

[sidhujag]

An economy is about trade. There are billions of creative people out there who would feel a lot better about themselves if they were trading instead of being Facebook zombies (see quote below). The transition from the one-way media of TV to interactive media of the Internet was more engaging, decentralized, and thus more valuable to the viewers/users. But still the users are basically powerless in the economic system and configurations of the Internet, i.e. the economic system and configurations of the Internet is up to now still more of a one-way action analogous to the TV era. Let's disrupt that and create another revolution.

Essentially Google's business model has to die. And they know it. They are trying to diversify into products, but that is not the solution. The solution is disrupt Google.

More details about what I have in mind should hopefully be forthcoming. As much as possible I want the project to be adaptable to decentralized improvements, analogous to how HTTP sits on top of TCP/IP. I am designing a base protocol and the world has to innovate on top of it if I am correct. Also I need to adjust to feedback and learn as I proceed.

We need an initial kickstart feature to drive it.

Interactivity of the Internet had great potential but it has been stifled by The Establishment. Asymmetric internet service, with upload speeds much slower than download speeds, precludes a truly interactive internet. It keeps end-users firmly locked into the role of consumers instead of allowing true peer-to-peer creation and interaction. We need to break this stranglehold before the Internet's full potential can be unleashed.

Its based on the fact that to this point ppl download much more than upload.. interactivity needs to be pushed by end users requesting it.. once market demands for such services it will happen as we switch over to fiber networks

[iamnotback]

Essentially I don't see crypto-currency's killer feature to replace what we already do with fiat paradigms. I rather see it opening up new capabilities that we can't do with existing fiat based, centralized systems.

CoinCube says the monetary systems can't bifurcate:

Thus what ever the cause of Leftism, I view it as a diseased religion that is on its deathbed as it culls itself because knowledge and technology are ready to move forward out of the Industrial usurious (high concentration of fixed capital) Age into a maximum division-of-labor (highly diversified annealing, low concentration of capital) Knowledge Age.

If the fundamental driver of leftism is usury then a decline in leftism is unlikely to proceed a decline in usury.

To reiterate, my thesis is that the economy may be bifurcating:

Yes, I disagree with the bifurcation part of your thesis.

On what rational grounds?

How is the usurious system placing any limits on growth of the Knowledge Age? Sorry I don't see it. I see it accelerating everyday.

Humans are not driven primarily by money but by their passions. That is why the monetary systems can diverge. The usurious system provides their tangible needs. The knowledge age feeds their passions.

I think you aren't aware of the revolution that 160 IQ genius Eric Raymond wrote about, helped drive, and well underway?

http://www.catb.org/esr/writings/magic-cauldron/magic-cauldron.html

Familiarize yourself with a gift culture and how it is orthogonal to physical needs.

Also the knowledge age is global and instantaneous already, but the usurious financial systems can't provide all functionality required. So this can be another reason for bifurcation. The Knowledge Age is already under way and can't wait for the decades it will take for a world government and some world currency unit that has a central bank controlling it so can be fractionally reserve debased (necessary for usury).

[alkan]

This is my contribution of how to achieve decentralization (and objectivity) without Proof-of-Work:
https://medium.com/@cv.alkan/decentralized-objective-consensus-without-proof-of-work-a983a0489f0a#.erem149vu

Decentralization and objective consensus are two of the main challenges faced by today’s cryptocurrencies. While the lack of objectivity is commonly attributed to Proof-of-Stake blockchains, the actual degree of decentralization is questionable in any existing consensus algorithm whether based on financial stake or computational resources. We will analyse both difficulties and present a novel blockchain model that offers objective consensus along with a strong tendency of decentralization.

This leaves us with the question why stake holders would build blocks if they get their interests anyway. Also, a powerful attacker might try to obtain the majority of the accounts with the aim of launching a double-spending attack. Hence we must curtail the trade with accounts and make it hard to gain majority control over the coins. Fortunately, both problems can be solved if we turn minter accounts into a non transferable, limited resource.

Even if we assume that some minters will keep their child accounts for themselves, they won’t be able to increase their total minting power without buying new accounts since the minting pool grows as well. All they can achieve is retaining their relative impact on the consensus. Eventually, with more and more stakeholders selling their child accounts, the minting power will become increasingly decentralized.

To summarize, our blockchain design is based on a dual token scheme with interacting PoS relationships. Minter accounts act as a second token, which you need to build the blockchain and also to “mint” child accounts, and there’s an opposite PoS relationship in that you need coins (the first token) to “fill” the minter account so that they can produce more coins (interests).

With the presented mechanism, new nodes don’t need to get the canocial blockchain from a trusted source since they can recognize it as such all by themselves. Our blockchain model thus offers objectivity of consensus under the assumption that at least “some” of the accounts are honest, whereby the required percentage of honest accounts depends on the relation between their life expectancy and the heartbeat period. As the heartbeat period can theoretically be set arbitrarily low, the protocol can reach objectivity even in the presence of an extremely powerful attacker.

Any thoughts or criticism?

[iamnotback]

Rehashing what was already discussed upthread:

Actually it is you who has been repeatedly embarrassed by insisting on using the same model for Monero as for Bitcoin when the situation is fundamentally different. Monero has 1) A tail emission and 2) An adaptive blocksize limit, which Bitcoin...

Edit: When it comes to the economics of electricity generation and consumption, and whether it favours de-centralization or centralization  this is a field that is currently changing very fast. So I will wait for your paper and then discuss it. The goalposts may well have moved by the time your paper is out.

Lol. If you thought I was embarrassed it was because of the inkblot in your comprehension of the issues. Centralization occurs due to economies-of-scale on hashrate. For example, propagation delay is ~0 for those who win their own blocks. I explain this all in my paper.

Well I have seen research where bacteria can be induced to produce energy. But even electricity cost and access became egalitarian, that still wouldn't change the fact that economies-of-scale in hashrate accrue (for many reasons, including economies-of-scale in hardware optimization and cooling to which no PoW algorithm can be immune).

Furthermore who said Monero is suitable for micro transactions on the main chain. We went over this already.

I see you haven't been paying attention:

Hey please husshhh. Keep this a secret please. Don't tell Blockstream et al, that side-chains are a fundamentally and insolubly broken design concept:

https://github.com/cosmos/cosmos/issues/46

Lol.  

[sidhujag]

Anonymint you suck at dealing with people lol

[Arvydas77]

Guys, you really must check Nexus project as they are working on "decentralizing the decentralization":
https://medium.com/@colincantrell/block-chain-decentralize-decentralization-318bbf355fa0#.eb0e3emz1

[iamnotback]

Anonymint you suck at dealing with people lol

Rewarding retards and failure is how you end up defeated.

Work with the best and be very friendly with those who excel.

I speak frankly and fairly (and even respectfully to those who earn it and are mutually respectful, i.e. not flippant), But arguing about tone is a waste of my time. You Millennials are the most emotionally sensitive that has ever been seen.

[HadiHussain]

Another way to think about why PoS isn't as secure as PoW in general:

PoS does not reinforce historical consensus. Every subsequent block in a PoW chain makes the history below it more secure because the cost of reversing it is superlinear in the number of blocks built on top. In PoS, this is not the case, the cost of producing a block is a constant, therefore the cost of reversing history is a constant.

[iamnotback]

In PoS, this is not the case, the cost of producing a block is a constant, therefore the cost of reversing history is a constant.

That is not strictly true though in TaPoS. Then it is not purely self-referential due to the external thermodynamics of users and their private keys.

[David Rabahy]

Is http://bravenewcoin.com/assets/Uploads/TransactionsAsProofOfStake10.pdf relevant?

[sidhujag]

Anonymint you suck at dealing with people lol

Rewarding retards and failure is how you end up defeated.

Work with the best and be very friendly with those who excel.

I speak frankly and fairly (and even respectfully to those who earn it and are mutually respectful, i.e. not flippant), But arguing about tone is a waste of my time. You Millennials are the most emotionally sensitive that has ever been seen.

That was my take away from that github link you posted, anyways take it as you may, im sure everyone else feels the same around here... but the world is full of inept retards like us right? lol!

Now I know exactly what you are thinking. Something along the lines of, "they don't get it, they are too dumb", or "I will show them, my whitepaper will refute the building blocks of the system in which they based their initial assumptions on", while I suggest you work on getting that out to the public, have cryptographers peer review it and pass it off as solid work before you self-proclaim yourself as a genius and start throwing every other project under the bus because "your" design has the perfect game theoretical assumptions for a system to work on large scale, yet you don't let others critic it like someone like yourself would because its private.

Release it to the hounds and then talk.

You may be more experienced than me in blockchain design and game theory but this is what I have observed from you, it will only help. I do actual work while you mull around picking designs apart without releasing anything of substance. I want to see something tangible because you might actually be of help to the community but its hard to take you serious when all you do is laud in your ability to create a perfect design without actually having a design know what I'm saying?

[iamnotback]

Now I know exactly what you are thinking. Something along the lines of, "they don't get it, they are too dumb"

No. I just don't think you are my target market. I have a larger demographic in mind. So unless you have something to say that is technically or marketing relevant, then I don't waste time on it. It isn't personal.

[iamnotback]

Remember I had found a high school level math probability error in their InstantX whitepaper.

Can you please point us to your post with review of InstantX?

I am not digging for it. Search this forum for "netcash", then dig through TPTB_need_war's thread.

Actually it is cited in my whitepaper but I am too lazy to go grab it for you.  

Then it just means it's never happened, nor your InstantX analysis nor your secret whitepaper. I searched for netcash, by the way, and found nothing relevant.

Well good thing you ran away, because I just found another high school probability error and this time it is in Bitcoin Unlimited. And you'll find the links to the prior Dash peer review I did in the following quote:

Also I find this explanation very good, also taken from BU's home page under FAQ section:

Will unlimited size blocks actually result in no fee market?

No. Intuitively you can understand this by realizing that it will take a lot longer to propagate a gigantic block across the network than a small one. Therefore a gigantic block has a higher likelihood of being "orphaned" -- that is, a competing block will be found, propagated across the network and supplant the gigantic block. In this case the miner of the gigantic block will lose the block subsidy and transaction fees. Therefore miners are incentivised by limitations in the underlying physical network to produce smaller blocks, and incentivized by transaction fees to produce larger ones.

Finding the balance between these forces is where the free market excels. As underlying physical networks improve or fees increase, miners will naturally be able to produce larger blocks. The transaction "supply" (space in a block) therefore depends directly on the fundamental capacity, rather than relying on some centralized "steering committee" to properly set maximum block size. Bitcoin is all about disintermediation, and this is another example of it working.

Bitcoin Unlimited is a vote for free markets. SegWit is like a communist centrally planned economy.

Although that sounds logical to a n00b, who ever wrote that and believes that must have forgotten or flunked their high school (or perhaps as late as 2nd year university) probability and statistics math class. Reminds me of when I found a high school level probability error in the masternode security model in Dash's InstantX white paper, not to mention how egregiously flawed the Dash the Instant X design is. Evan Duffield replied, but then ran away. Even the economic arguments for Dash's flawed design were refuted. Note that Dash's required premixing (and even not premixing if not employing homomorphic encryption of transaction values, i.e Monero before RingCT) eliminates the possibility of merging UTXO balances and thus causes an exponential blowup in UTXO, which is an issue for scaling to trillions of microtransactions given that performance requires keeping UTXO in RAM.

The probability that another block solution will be found within the propagation time t (not to be confused with at the time t) is the Poisson process (λt)e^-λt where n = 1 (i.e. only one or more occurrences required). Which as λt becomes smaller than roughly ¹/₁₀₀ then e^-λt is closely approximated by 1 - λt or approximately 1. Thus, we can see the probability that another block solution will be found within the propagation time t approximates a linear proportion λt when λt is less than roughly ¹/₁₀₀.

So with a block period (aka block time) λ of 10 minutes and a propagation time t (for finding a second block) of less than 6 seconds (and propagation will usually be less than 600 milliseconds so that is even a more linear relationship at  ¹/₁₀₀₀), then presuming roughly (on average) that doubling the block size doubles both the transaction fees and the propagation time, then the miner has the same income on average with the largest possible block they can make because doubling the risk of another miner finding a block also doubles the miner's income per block statically speaking. If you don't understand this, then read it over and over until you grasp the mathematical (statistical) point that the quoted statement above is incorrect and there is no free market limit on block size and no fee market. The point being that yes the risk of another miner winning the block increases, but the miner's income commensurately (proportionally) also increases, so statistically the miner loses nothing by creating a larger block and thus is leaving tranactions fees on the table for some other miner to take if the miner doesn't make a larger block. However presuming some transactions pay less per byte than others (and higher valued transactions can afford to pay more per byte), the economic converse effect occurs wherein the miner has the incentive to make the smallest block possible or below the size where propagation latency is linearly proportional to block size (i.e. the latency that is a constant factor independent of data transferred), which is again not a free market limit on block size and not a fee market. So the same Tragedy-of-the-Commons occurs that has always been argued as the problem with unlimited block size, in that the power vacuum must be filled by a collusion of miners which pool their (at least 33% of the systemic) hashrate and selfish mine against the rest of the network enforcing a block size which maximizing their profit which is basically the highest level of fees x volume the market will bear. I had even argued (I claim successfully) against @ArticMine that Monero's algorithmically adjusting block size suffers from a similar Tragedy-of-the-Commons outcome (ultimately due to the power-law centralization of mining economies-of-scale). No matter how you slice and dice it, Satoshi's PoW will become centralized so choose your poison how you want to get there, Bitcoin Core (aka Blockstream) funded by banksters or Bitcoin Unlimited (with insufficient developer resources) lead by technical incompetents such as Roger Ver. This is why I designed (a yet unpublished) solution for blockchain consensus which is not PoW and not PoW (something totally new, which I am working on now).

Even if you try to argue that propagation out to the minority hashrate can take up to minutes, the most profitable (i.e. winning) economics models selfish mining wherein only the minimum propagation time to only 33% of the hashrate is relevant, thus it is likely to be (and currently is even to the average network diameter, i.e. the majority) less than 6 seconds.

Bitcoin has taken a big hit because of Bitcoin Unlimited. Roger Ver with his recent affiliation with the technologically flawed Dash (and his Dash pump) and attacking Bitcoin with big blocks is really trying to shake things up, but as I had explained Roger Ver is somewhat technically myopic. Also perhaps some people may be speculating Winkervoss twins might liquidate.


P.S. I liked @gmaxwell's explanation of why cryptocurrency fundamentally must rely on cryptography.


Edit: @aklan made me aware of a Bitcoin Unlimited white paper, which I am reading now and will respond soon.