As posted in another thread, I stumbled over a scenario in which total mining power might fall if there is no sufficiently small limit on the number of transactions per block:
http://bitcointalk.org/index.php?topic=6284.0The discussion on
whether it will happen aside, this thread is about what happens
if it happens.
My guess would be that, in such a case, we'd end up with a miner supply that's not super-small, but nowhere near the supercomputer level we're currently running for. This scenario has the obvious benefit of low transaction fees, but is generally feared because of an attack that can split the block chain, reverting a past transaction. (Other dangerous effects?)
Any estimates on the troubles we face, considering a fairly large, world-wide Bitcoin network? Might there be methods to construct "insurance miners" that jump in on unwanted splits of the block chain? Maybe changes in the protocol, further rules to counter splits?
A Bitcoin network based on as few miners as possible would be a great success, we would have beautifully low transaction fees. Maybe what I fear as a danger might be a benefit, if there's a way to keep it stable against attacks. The "valid chain insurance" mining groups would behave great in that respect. Maybe this is the solution to the whole problem?
