Top-of-the-line GPUs have nearly the same main memory bandwidth as L2 cache or within a factor of 2 or 3, e.g. 2012 model AMD Taihiti at 264 GB per second. Some latest GPUs may be 1 TB per second even nearly as fast as L1.
That's fine - as long as those GPUs are of a similar cost and/or have higher energy requirements than comparable CPUs. Even if the GPUs are 2 or 3 times more efficient than CPUs - the capital investment still precludes it from being a viable business, which is the aim.
However, the L2 are 256 KB on Intel so you need to adjust your 512 KB downwards.
Also AMD has no L2 and the L3 is significantly slower. Maybe you are not concerned about losing those who run AMD.
Worse as far as I can see your algorithm can be trivially parallel.
The memory bus is the bottleneck - you can parallelize until you run out of bandwidth there.
I see one definite problem that makes your assumption false and potentially a second problem, but if I tell you what they are then I will give away a lot of the work I have done to make a truly CPU-only proof-of-work.
CPU-only will always have a slow hash. There is no way around it.
I guess you will find out when you release this and it is attacked by GPUs (and botnets), and if I release my open source, then you can copy it (although you won't be able to because the slow hash won't work in your overall design). I don't want to give you first mover advantage by telling you now.
