IOTA shares a similar fate. With unprofitable mining and no block rewards, you just issue the coin supply yourself, effortlessly create a monopoly out of thin air, attempt to pump the price, and now if anyone requires IOTA for some particular reason, you now get to extort them. In this regard, IOTA is also a permissioned ledger because there's no entry point into the system besides the extortioners.
In PoW, the coins are constantly being recycled by transaction fees acting as mining reward, meaning there is always a permissionless entry point.
r0ach your analysis is incomplete.
Users could gain any crypto-currency by working and being paid in that crypto-currency. Please make it clear that you are referring to a cyrpto-currency which is targeted to investors (speculators) who thus have no way to obtain coins except to buy them in an ICO, because there are no coins created to pay miners and there are no transaction fees (except if IOTA ends up requiring centralization to enforce the Monte-Carlo algorithm as I allege, in which case those centralized servers could demand fees).
Again if the goal was to distribute the coin to the users and not to speculators, the unprofitable mining would not necessarily be a hindrance. And if those users then sold their coins to speculators on exchanges, then there is not a problem.
Your problem with IOTA is its distribution scheme is ICO, not whether the mining is unprofitable. Please don't conflate orthogonal issues.
This is important, becuse otherwise you will misunderstand my coin's design and make a mistake that will cost you a lost opportunity.