Is the current network difficulty algorithm appropriate for "Peak transaction-only mining"? At some point in the future miners will depend more on the Tx fee than per-block payout.

Right now people turn on and off their equipment based on local trends such as price of electricity, etc.  On the whole I don't think these local decisions affect mining as a whole.   However, if a Global trend is identified and people turn off and turn off the rigs accordingly then that will weaken the network at certain times.  

Suppose the most profitable Tx fees occur in a certain time of day, and people will turn on their mining rigs, and they shut it down for less efficient hours.


  I think that if done to a significant scale, "peak Tx mining" can cause issues in security and network security.


Question

If the purpose of difficulty is to make mining new blocks more consistent over time, is it equally effective in making Tx-based payouts fair with short intervals?  

More detail

Suppose significant portion of the mining ecosystem determines that the most valuable transactions are mined between 4pm and 5pm EST where the most profit can be made.  Conversely it's not profitable at all to mine at 2am-5am EST, so shut the machine down and save on electricity.

This may result in several things


Difficulty for peak hashrate differs greatly from difficulty for non-peak hashrate (within a 24 hour period)
Certain times of day where the network is more likely to be overtaken by hostile compute power
Unfair /disproportionate distribution of fees among miners
Many more blocks are created at peak times due to the increased available hashpower


What safety nets are there to protect against this?  

For what it's worth, the BitMinter client already has the ability to schedule the usage of mining resources.  The intention is for minimizing local electricity cost, I don't think that would have a negative impact since this is a global mining network and electricity price changes occur every hour and should even itself out.  Conversely if it is used to mine according to trends in the whole Bitcoin network... I think that could lead to negative consequences.
Interesting thought.

Years from now we may get to a point where transaction fees are the majority of mining income and profits are so marginalized that electricity expense is a major factor. What makes sense for a miner may be to have a low-power computer with ASICs sitting idle and waiting until there are some transactions with big juicy fees, then actually start mining. Once someone mined a block with those transactions the fees are no longer up for grabs, so your equipment goes dormant again to conserve electricity.

So far not a big issue I think, because the busy and slow periods are hard to predict. The problem is if we have certain times of day when a large portion of bitcoin users are asleep, resulting in very little value available from transaction fees. Or if you could artificially create a slow period by somehow hindering the propagation of transactions.

If you know beforehand that 50% of the hashpower will switch off for a certain time period then you don't need the infamous 51% hashpower majority to pull off a double-spend - the equivalent would now be 26% of global hashpower.

So yes, if a large portion of the hashpower switches off systematically at the same time, I think that could become a weakness. But I don't see it happening until we get to a point where most, if not all, of the income from mining comes from transaction fees.