Interesting. Ok you definitely see the problem I see with these coins. Why exactly am I wrong though?
If you "invest" in a coin then definitely, inflationary model won't be appealing. On the deflationary model you're just gambling that you'll figure out when to dump, before others do. Some will win, some will lose, in the end it's a sick gable. Worst thing that can happen to you is get very lucky on the first coins you try. suicide will soon follow HAHAH
However if the coin is NOT just a platform for ponzi games, it has usefulness, then you can safely treat is as a commodity (or so I'm inclined to think).
The idea came to me for the particular use of mixing transactions. In that case, there will definitely be a lot of buys and sells, but not to invest, but because of the mixing going on. So profit can be made by trading the coin, short term, sell a bit higher, buy a bit lower and do that a huge number of times. Also I suggested burning the tx fees (which should be substantial fees), instead of adding to the mining reward, and burning a % from old inputs. This coin would only exist to be transacted, if you don't transact it, you are sure to lose.
And of course the reward would not increase infinitely. At some point the maximum hashpower will be reached. It should even decrease, if the market price falls. I think my idea simply deters ponzi usage of it, and gives the reward to miners and skilled traders. And the actual users will pay the bill (gladly!). If you try to mix with Monero, good luck! Or just wait until the order book looks like it might be a safe time to do it. With the kind of coin I'm proposing I don't think fluctuations can be too severe over short periods of time.
PS: with normal currency, for example EUR and USD are both inflationary, right? If you think investing in dollars now and gain something 10 years in the future, you are an idiot. But still there's good money to be made on forex. Right? In fact if they hold back on the inflation, they're actually in big trouble. Like what's happening now with the crysis. Which I guess is because the inflationary mechanism they used wasn't a good one. But still we need to find ways to inflate them
That's the state cryptocoins are in right now, anybody who holds them is essentially an idiot. We are all idiots. I'm an idiot I'm holding 2.5M BURST, hoping that a bigger idiot will eventually show up. But I'm forced to do it. Thanks, y'all!
If you're holding a coin obviously it seems like the right decision to reduce supply, it therefore increases the value of what you own (supply/demand). However if no one cares about what you have anymore you're essentially a bag holder, so it doesn't even matter what the supply and demand end up as. There wont be any demand because people will no longer care.
Money has value because people give it value, not necessarily because the supply is limited or it does something fancy. It has a lot to do with psychology as much as it has to do with math.
The 'care' Burst has right now is it's relatively profitable, it's interesting (miners are geeks), and it has a decent community (which are almost entirely all miners). If the block reward hits rock bottom, then you better hope that there are people besides miners supporting the coin or they'll leave with the money. I don't think that's something a lot of coin makers understand. BTC and altcoins are very community driven and it all comes from the miners. We're essentially paid to care.
That's why I proposed freezing the block reward or changing it to a more manageable and more appealing form to miners. One of the biggest issues I had with going in on Burst in the first place is I have to buy hardware JUST for one coin. If Burst crashes or other alt coins don't pop up, I'm essentially stuck with a bunch of used hardware that relatively no one is going to want. I could and did sell off my GPUs, but HDs are much harder to sell used because they have a effective life time. They go bad overtime. Buying a used drive is taking a pretty big gamble.
As a miner I hoped and still do that altcoins pop up that also use POC, even if they aren't highly successful because it gives miners more options and assurance. POCs unique model would allow you to mine more then one altcoin at the same time too (use the same plots). Although I'm not sure how this will influence the economics of coins if they can all be mined at the same time (and maybe they wouldn't want to be and a replot would be required).
Playing coins will always happen. Theres always going to be people that see coins as 'get rich fast' things and the whole reason I'm mining burst right now is because I could make some money doing it. I'm not going to lie. The people that hold the coin right now also I'm sure are holding it because they think it'll be worth more, they're also here for profit. But that also means we all have a reason to work together.
I'm not sure I fully understand all of what you're saying in your post though. Payouts right now are all proportional. It's a giant pie. If you give everyone their own pie, they'll just dump them all. So while I'm against overall scarcity, there needs to be balance for income for miners. A model that's based on market volume may not be a horrible idea (but it may also cause things to explode). It'd be interesting to try for a prototype coin, but not for a established coin.
I do agree about the transaction fees. Blockrewards in general are just made to encourage people to jump in and 'get rich' early, but it deters people from staying on the coin. If the blockreward was frozen and transmission fees were increased it may just cause people to not trade the coin and that's also something you don't want. Transmission fees right now are grossly small though compared to the blockreward. If they were something like they are for BTC that wouldn't be bad... like $.04-.01 per transmission. Maybe proportional compared to the blockreward, decreasing over time.
I'm not sure exactly where the limits are on Bitcoin's scripts, but it likely is able to handle at least the simple side of the previously described transfer. Monitoring btc's blockchain would introduce a ton of unwanted traffic, and would only assist in transfering between one coin instead of any.
I'm not sure this is what you want to hear, but as your average Joe miner, I still have no idea what ATs are and what they mean to me as a miner or a user of burst. Best I can tell, you can use them as fundraisers, but there is currently no way of actually looking at them or doing anything with them without a bunch of messing around (special scripts).
That's a problem with Burst in general, it's not user friendly at all. I still think there should be a official online wallet with security and all that jazz. Since all you need is your passphrase, you should be able to access your wallet anywhere without any downloads. That's actually one of the best parts of this coin is it's all web based.