(On Legitimacy of Blockchains - 5)
Some people have proposed that, by making each block of transactions sufficiently large (e.g. tens or even hundreds of MB instead of being bound under BTC's 1MB limit), we can keep the average transaction fee reasonably low even if there be no external mining reward whatsoever. This is because more transactions mean less price paid by each.
This, however, only allows large-scale institutions (e.g. companies, organizations, etc) to participate as the blockchain's miner nodes; individuals and small groups won't be able to afford to store big-blocks as well as handle their massive network bandwidth. And it means that only institutions that are big enough (so big that they are easily recognized by the public) will be able to mine blocks in such an environment.
This is fine for most parts, since small miners usually choose to join a mining pool instead of just mining on their own, which is a functional equivalent to a single mining entity anyways. From an end-user's point of view, there doesn't seem to be a noticeable difference.
If individual miners are all publicly identifiable institutions, however, why should we bother to validate transactions based on the principle of PoW in the first place? Wouldn't it be a rather easy Byzantine Generals problem of simply casting virtual votes in a gossip protocol, since the identity of every one of its participants must be transparent? Furthermore, if a government under an oppressive regime decides to ban blockchains altogether, wouldn't this semi-centralized mining plan be so helplessly vulnerable against it?
And if we are supposed to welcome any kind of government-driven currency regulation, why bother to use a blockchain at all instead of just relying on the CBDC?