On May 30, 2015 10:38 PM, "Gavin Andresen" <gavinandresen@gmail.com> wrote:
>
> Mining is a competitive business, the marginal miner will ALWAYS be going out of business.
>
> That is completely independent of the block size, block subsidy, or transaction fees.

No, the later determines who can be profitable.
Here's a thought experiment:

Subsidy is gone, all the block reward comes from fees.
Miner A has great connectivity and mines 20 MB blocks, with an average of 20 btc per block.
Miner B has a connectivity such that 2 MB blocks puts it on a reasonable orphan rate, so it gets an average of 2 btc per block mined.
But the difficulty is the same for all and it can rise up to miner A breaking even after energy costs.
Will miner B be profitable with this setup? The answer is no and miner B will just go out of business. In that sense too, bigger blocks mean more mining centralization.