Various altcoins use different methods to allow for a dynamic blocksize. They may not be perfect but at least they exist for inspiration. However, Bitcoin is supposed to be conservative in its approach to things, and that's great, but let's face it…even if a 2mb fork were to succeed it won't be enough for long.
What I would like to know though is: what method is the MOST conservative method for a MAXIMALLY DYNAMIC blocksize protocol, subject to meeting the following criteria:
at any time a miner could make a block of arbitrary size (even as big as, say, 100mb) as long as
there is a penalty/cost imposed by the network protocol on the miner that is a (probably nonlinear) function of blocksize such that
the penalty, by its very nature, would make it prohibitively expensive for the miner to game
causing miners to act rationally and only create larger blocks when the (non-cartel) fee revenue justify the penalty the miner is hit with
My personal favorite that (I believe) meets this criteria is to delay miner rewards according to delay = max(100, 100n2) blocks via a publicly verifiable CLTV where n is the block's size in megabytes. So a 100mb block would delay the miner's reward by approximately 20 years. A 2 mb block would delay the reward by 2.4 days or so (compared to the normal 16 hours).
What other options are there that would meet these goals?