On Wed, Dec 16, 2015 at 3:59 PM, Pieter Wuille <pieter.wuille@gmail.com> wrote:

On Wed, Dec 16, 2015 at 9:38 PM, Jeff Garzik via bitcoin-dev
<bitcoin-dev@lists.linuxfoundation.org> wrote:
> 4.3. Observations on new block economic model
>
> SW complicates block economics by creating two separate, supply limited
> resources.

Not correct. I propose defining the virtual_block_size as base_size +
witness_size * 0.25, and limiting virtual_block_size to 1M. This
creates a single variable to optimize for. If accepted, miners are
incentived to maximize fee per virtual_block_size instead of per size.

It is correct. There are two separate sets of economic actors and levels of contention for each set of space.

That is true regardless of the proposed miner selection algorithm.

> 5.4. Problem: More complex economic policy, new game theory, new bidding
> structure risks.
>
> Splitting blocks into two pieces, each with separate and distinct behaviors
> and resource values, creates two fee markets.

I believe you have misunderstood the proposal in that case.

See above. There are two separate and distinct resource velocities and demand levels in reality. That creates two markets regardless of miner selection algorithm in the block maker.