On Wed, Feb 13, 2013 at 7:28 PM, Gregory Maxwell <gmaxwell@gmail.com> wrote:
<bunch of stuff>

I understand your arguments, but don't agree with many of your conclusions.

The requirement for everyone to hear the history doesn't get talked
about much

One of the beauties of bitcoin is that the miners have a very strong incentive to distribute as widely and as quickly as possible the blocks they find...they also have a very strong incentive to hear about the blocks that others find.  There will not be an issue with blocks being "jealously guarded"...what miners will want is a good feed of transactions that they want to mine.  They will be willing to pay for those feeds (either by sharing the proceeds with highly connected "relay" nodes or by operating highly connected nodes themselves).  Because miners will only want to pay to get a feed of profitable transactions, they will not pay to receive transactions whose miner fee does not cover the "relay" fee (by which I mean the fee or cost associated with the bandwidth and validation that a transaction requires) with some amount of profit.  This means that the relay node will not fetch and propagate those transactions whose fee is too small (unless there was some other fee structure outside the miners fee).

These are relatively easy businesses to operate...which means there will be a lot of them and they'll compete on fees (with wallets automatically discovering the cheapest of the services).  If the businesses of relaying and mining ever became too centralized, other businesses with a vested interest in the success of bitcoin would take the necessary steps to ensure there remained adequate decentralization.

It's important to remember that the centralization that currently exists in the fiat currency world benefits one set of businesses to the detriment of many others.  Having a functioning and trustworthy payment system benefits far more people and businesses than a centralized system would.  

It is good to be wary of these potential issues, but I don't see how the economics are likely to yield the outcome you fear.  And, really, there's not a lot that can be done to prevent economics from dictating the ultimate outcome.  In fact, what I write above is not so much about what I think *should* be built, it's more about what I *predict* will be built.