Miners profit from increased competition (for transactions to be included in smaller blocks) increasing the transaction fees. Only transactions with the highest fees are put into blocks.

It was proven several times with the "stress tests" of Bitcoin network.

> It was proven several times with the "stress tests" of Bitcoin network.

An attack on the network doesn't prove anything about the economic incentives that make up the mechanics of the system. Bigger blocks hold more data and transactions pay by the kilobyte. That's all there is to it.

Increased fees per transaction may give more money in the short term, but ultimately it isn't how a crypto currency will be sustained, because at any point a fork could have lower fees.

It's simple supply and demand. The less supply increases the demand for transactions and transaction fees. Larger blocks have way more supply and thus the fees are a minimum. Miners know this which is why they're not increasing block size.

There is nothing short term about it. The more competition the greater the fees and profits in the long run.

Miners haven't yet increased the block size because the Chinese miners are both risk adverse and afraid that any increase will give them more latency, which could reduce their mining competitiveness.

As soon as transactions are legitimately getting hung up with reasonable fees, any of the thousands of forks have the potential to fill the void and decrease fees since there is no real technical limit to blocksizes in the same orders of magnitude.

So what you are forgetting is competition in your model of supply and demand.

Miners will do what is most profitable for themselves. If they can double the amount in fees that they mine without halving the number of blocks they mine, they will do it, because they will make more money that way. This is much more likely than not since the latency introduced to block propagation from something like 1MB to 2MB is insignificant compared to the probability that someone else will mine another block and propagate it first.

The blocksize increase you're describing only benefits a single individual once. Once increased and there is no more competition, transaction fees drop to almost nothing again for all miners.

Bitcoin prevents individuals from making these one-time power grabs by design. Even if they colluded, the miners are not going to agree to increase the blocksize because it immediately means less money for 99.999% of them.

Again, it's tragedy of the commons. They could work together to make the shared resource better for someone trying to use Bitcoin as a day to day currency, but instead they're rationally maximizing their own returns.

> The blocksize increase you're describing only benefits a single individual once. Once increased and there is no more competition, transaction fees drop to almost nothing again for all miners.

This isn't true now and it hasn't been for quite a while now, transactions need to carry fees to go through because miners have another choice that you happen to overlook - they don't have to mine a transaction if they don't want to. Miners can ignore transactions and let another miner mine them. This is actually beneficial for them because it decreases their blocksize and therefore their latency. If a miner mines a block unusually quickly by chance and wants to be generous, they can include more low fee transactions but I'm not sure this something anyone is doing automatically.

So it isn't the bleak outlook you describe because mining small fee transactions isn't to anyone's benefit.

Now you're just being ignorant. The base transaction fee to cover latency is magnitudes less than that to be included in a competitive smaller block.

The point still stands, and you're demonstrating confirmation bias. How much money have you put into Bitcoin, I wonder?

> The base transaction fee to cover latency is magnitudes less than that to be included in a competitive smaller block.

None of this makes any sense at all, the words don't even go together in the context of bitcoin. It is isn't even coherent enough to be true or false, it reads more like some sort of auto generated nonsense. Do you even understand what I said earlier?

I get that you have some sort of vendetta against bitcoin but stringing words is pretty desperate.