Why do miners not always "vote" to increase the block gas limit?

Question

Miners can increase/decrease the block gas limit. I read that they can increase/decrease for about 0.01% per block.

Why do miners not always want to increase the block limit? This would lead in more gas spending. From an economic perspective you would want the gas price to stay the same or go higher so the block reward goes up too (in ETH).

During the current token spam transactions which have to do to get tokens listed on an exchange lots of high gwei transactions exist. So, for me it would be logical to keep increasing block gas limit so you can mine more of these high gas txns in a block. However, the block gas limit stays about the same (8 million). Why?

Answer 1

From a direct financial perspective a higher limit isn't necessarily better because creating a little bit of scarcity can make the gas prices people pay for each unit higher. However, Ethereum miners have generally tended to increase the limit where practical, whether because they think it directly improves their profits or because they think this is better for the overall health of the network.

Currently the main problem with raising the gas limit is that it increases the uncle rate - the proportion of blocks that cannot be propagated and validated fast enough to be built on before another block is found. There is more about this and related dynamics here: What are Ethereum performance dynamics?

Another concern with a higher gas limit is that it makes it more difficult for non-miners, who nevertheless want to run a validating node, to keep up. (It's not clear whether this is something miners are considering or not.)

Note that miner incentives can be quite complex as mining is competitive and its costs increase as competing hashpower increases, so it may be rational to reduce the overall revenue that can be obtained through mining, if by doing so you increase your revenue relative to other miners. In theory this would suggest that miners with the ability to validate and propagate quickly should vote the gas limit up, while miners that can only validate and propagate slowly should vote it down.

Answer 2

Increasing the block gas limit entails more transactions and/or more expensive transactions can be included in the block. This has several consequences.

The first consequence of increased supply of transaction resources is that, in theory, this leads to lower prices for transactions (which may be made up for by increased volume).

More transactions (or more complex ones) also means larger blocks which translates to increased storage requirements. Miners may wish to limit the growth of the blockchain's storage requirements.

The third consequence is it takes longer for nodes to process transactions in the blocks. This makes it harder for lower-end nodes to stay in sync with the network.

Larger blocks lead to more uncles.

Mis-priced op-codes on the EVM can lead to attacks. While higher block limits do not necessarily lead to increased block sizes (a miner may opt to simply ignore all transactions), miners could also vote to lower the gas limit to minimize damage from other miners who do mine malicious transactions.

Another reason why miners may not opt to increase block gas limits is because they might be voting. At least one bit of information can be encoded by the block gas limit relative to the prior block. I'm pretty sure this has been used before, but I couldn't find a reference (I thought it was used for EIP 150 or some other fork).