On Sun, Nov 8, 2015 at 12:19 PM, Bryan Bishop <kanzure@gmail.com> wrote:

Gavin, could you please provide some clarity around the definition and meaning of "key-holder [decentralization]"? Is this about the absolute number of key-holders? or rather about the number of transactions (per unit time?) that key-holders make? Both/other?

Both. If few transactions are possible, then that limits the number of key-holders who can participate in the system.

Imagine the max block size was really small, and stretch your imagination and just assume there would be enough demand that those small number of transactions pay enough transaction fees to secure the network. Each transaction must, therefore, pay a high fee. That limits the number of keyholders to institutions with very-large-value transactions-- it is the "Bitcoin as a clearing network for big financial players" model.

Using the Lightning Network doesn't help, since every Lightning Network transaction IS a set of Bitcoin transactions, ready to be dropped onto the main chain. If those Lightning Network transactions don't have enough fees, then the whole security of the Lightning Protocol falls apart (since it relies on being able to get timelocked transactions confirmed on the main chain in case your trading partner cheats).

There is video of the Poon/Dryja talk: https://youtu.be/TgjrS-BPWDQ?t=41m58s

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Gavin Andresen