Why a fee market and maybe even fees will never need to exist

The whole blocksize debate with the limits and fee market has so many discussions going on about how fees will eventually need to replace the coinbase mining subsidy. There seems to be widespread agreement that fees will need to replace the subsidy at some point. I feel that this theory is incorrect and here is why.

If fees are kept low and bitcoin is allowed to scale on chain it will become more appealing for companies to adopt for every day use. More and more businesses will move toward accepting and using bitcoin. Some of those businesses will want and need to run their own nodes. Yes bigger blocks may cause some people with poor internet and insufficient funds to run a node to shut their nodes down. In the long run business nodes, academic nodes, and even government nodes will more than make up for the home nodes lost.

As the mining subsidy goes down it is foreseeable that if fees do not increase large mining operations will need to shutdown. I see this as a good thing. Businesses that use and rely on bitcoin (probably the ones running full nodes)can be made aware of this. In order to keep fees low and even free for themselves and their customers they can fire up their own small mining operations in their own data centers. Yes I said free. They can include their own transactions into blocks the mine for free and partner with other miners to do the same. Mining will again become decentralized. Maybe these small business data centers are what Satoshi foresaw.

Why would companies pay for these mining operations? They pay huge amounts in fees for bank and credit card transactions. They could easily save on those fees with bitcoin and redirect that cash to mining and nodes. If not greedy they could even offer small discounts to bitcoin customers and still be ahead.

Imagine if every fortune 500 company ran at least one node and either ran a node for themselves or paid a data center for hash rate to keep their fees at or near 0. Right now according to my irc bot the network hash rate is about 2368ph. That's 4.736ph per company. Now more than just those companies will want this benefit so cut that number way down. People with cheap and free electric will also cut that down as long as they can pick up or continue to run old miners.

Afraid of the size of blocks needed for all those transaction? Think the node count will be a problem with blocks ? There were 26355 universities worldwide in 2016[1]. Add that to businesses that need nodes and even a small fraction of the libraries in the world and you are over 50000 nodes easily. That enough for decentralization?

Another reason fees never need to increase or can even go down. As long as the price of bitcoin doubles every four years there is no need for mining fees. At the first halving the price was $12.25 and at the second $652.14[2]. Do you see $1304.28 by 2020 and 2608.54 by 2024? That's all it takes for fees to be minimal or 0 and mining rewards to have the same value.

So I give to you my version of the future where nodes are plentiful, mining returns to decentralized, and fees are not needed. No fee market needs to develop. We just bigger blocks to increase transactions per second to allow for that adoption to occur.

source

[1] http://www.webometrics.info/en/node/54
[2] https://99bitcoins.com/price-chart-history/