"So yes there are those at the top, the developers"
I'm still not seeing how they are 'at the top'. All they do is write an open source node implementation. Actually, I've found the Bcash proponents logic quite bizarre. First they tell you that running your own node 'does nothing', 2 minutes later they're screaming at the Core Developers. Seriously WTF?
Currently I run a Bitcoin Core full node on my Core i3 media centre. I only began running it this year due to the repeated attempted attacks against Bitcoin. You're free to try and win me over to another implementation, however, I must warn you that node implementations with goals of increasing how much it costs me to run it, aren't major selling points.
"who don't care about transaction rates, or fees, as they see Bitcoin as an electronic cash system, not a settlement network, as stated in the white paper."
I think you meant to phrase that sentence the other way around???
"who don't care about transaction rates, or fees"
These concerns are secondary only to keeping the network decentralised. There's no massive demand for just another Visa.
"as they see Bitcoin as an electronic cash system, not a settlement network"
It's both.
"Their reasoning for not changing code or block size is usage space"
And network load, and initial download size.
"but the miners can and could produce larger blocks, which they would, then there is no issue, it should be within market forces to judge IMO"
The market has spoken. Bcash with 8MB blocks is worth ~14% of one Bitcoin. Might have to wait a few more days though to see if it settles due to the recent pump and dump. This is pretty close to its September price, only significantly higher against fiat.
"The second layers, third layers they and you talk of, will be and are being done off chain,"
Lightning opens channels on the chain, and you commit your bitcoin to the channel. When the channel is closed, the changes are broadcast to the blockchain.
"which a) means it is no longer bitcoin miners"
The miners will process the transaction when the channel is closed. However, these transactions will on average be much more efficient than traditional transactions by containing a large multitude of inputs and outputs in the one transaction, of which an even higher multitude of individual transactions could have occurred. This is scaling.
"it is no longer bitcoin at all"
Since:
* Your bitcoin is committed to the channel and cannot be double spent
* The state is broadcast and settled on the chain when the channel closes
* Spending and receiving of coins in the channel occurs exactly the same way it occurs directly on the chain, just simply in the channel not broadcast
Therefore it is still Bitcoin.
"Lastly, tell me, how will variable transaction fees ever scale?"
As per my above answer to the 'it is no longer bitcoin miners' quote.
