I saw this thread:

http://www.reddit.com/r/Bitcoin/comments/2kerxd/so_ive_heard_both_peter_todd_and_amir_taaki_say/

check out "The economics of digital currencies" by the Bank of England,
page 5 titled "The sustainability of digital currencies’ low transaction
fees"

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q3digitalcurrenciesbitcoin2.pdf

Pasted here below:

Why transaction fees are currently low
======================================

Importantly, fees are low for digital currency payments despite
the fact that, as currently designed, the marginal cost of
verifying transactions by miners is generally higher than that
for centralised payment systems. These higher marginal costs
are due to increasing returns to scale in the operation of
computer servers: it would generally be more cost efficient
to process all transactions centrally. Moreover, while the
marginal costs for traditional payment systems may be
expected to remain broadly constant over time, those incurred
by digital currency miners may be expected to rise as their
usage increases and — in addition to that — to increase over
time because of an incentive for overinvestment in new
equipment. These drivers of marginal costs are explained in
more detail in the box on page 7.

Low transaction fees for digital currency payments are largely
driven by a subsidy that is paid to transaction verifiers (miners)
in the form of new currency. The size of this subsidy depends
not only on the current price of the digital currency, but also
on miners’ beliefs about the future price of the digital
currency. Together with the greater competition between
miners than exists within centralised payment systems, this
extra revenue allows miners to accept transaction fees that
are considerably below the expected marginal cost of
successfully verifying a block of transactions. (1)
The sustainability of low transaction fees
In the near term, the subsidies in the form of new currency
that miners receive create an incentive for miners to promote
the wider adoption of the digital currency they support, since
anticipated increases in demand should help to drive up the
expected value of their future revenue from new currency.
A willingness to accept extremely low transaction fees today
can then persist so long as miners’ optimism about future
increases in system usage remains.

The eventual supply of digital currencies is typically fixed,
however, so that in the long run it will not be possible to
sustain a subsidy to miners. Digital currencies with an
ultimately fixed supply will then be forced to compete with
other payment systems on the basis of costs. With their
higher marginal costs, digital currencies will struggle to
compete with centralised systems unless the number of
miners falls, allowing the remaining miners to realise
economies of scale. A significant risk to digital currencies’
sustained use as payment systems is therefore that they
will not be able to compete on cost without degenerating —
in the limiting case — to a monopoly miner, thereby
defeating their original design goals and exposing them to
risk of system-wide fraud.