People won't waste electricity (money) mining just to fight inflation. And if hashrate doesn't matter people can just mine with 1% of their CPU so the interest rate is essentially free and it's just a gimmick that you have to mine for it.
And 5% in crypto is laughable if you think about it. The price of most coins move way more than 5% in a single day so holding money solely for the 5% interest in such volatility is kind of stupid.
There's no incentive to mine a coin like this so it will have a poor network open to attacks.
What you could probably do is to have a small block reward plus a certain percentage of the coins in the wallet (address) which mined it. So for example if the blockreward is 5 coins +1% of the address miend it, then a new wallet would earn 5 coins and someone who has 1000 coins would earn 5+10 coins. But that would end up with everyone mining on one pool which has a lot of coins so everyone would earn the most. And rich gets richer system are counterproductive in crypto.
You make good points. I threw out 5% as an example. Maybe if it starts at a higher value like 100% a year and halves every four years until the network matures it may give miners a higher incentive to mine.
Hash rate DOES matter in this hypothetical altcoin but you only get the rewards from transaction fees in the blocks. In a new cryptocurrency these rewards would be minimal but in a mature high volume transaction system with full blocks there will be an incentive to use higher hash rates to mine those blocks. Bitcoin’s mining rewards will eventually solely be based on transaction fees. If miners are predicted to mine that, then surely they would mine a block that gives them transaction fees coupled with an interest rate just for trying.
Anyways, if, as you say, there is no way to track how long someone has been mining, then this kind of altcoin cannot exist at the moment. People who have no coins in their wallet would also probably not mine as %100 interest of 0 won’t give you anything.