Quote from: Etlase2 on May 05, 2013, 03:05:43 PM

Quote from: kokjo on May 05, 2013, 10:25:42 AM

...and where did that $1 go?

Electricity, hardware, and opportunity costs.

It's the same as bitcoin, but because minting in decrits is a "burst" operation rather than a sustained one, finding ways to reduce the cost of electricity is going to cost you in hardware and opportunity--costs that are unlikely to ever be recovered because only a fraction of new money comes from minting, and even that fraction depends on a large initial wasted investment in the MBQ. Even if you can take electricity costs to essentially zero via ASICs or whatever, the development and production costs of those ASICs are distributed to people other than those who spent the time and money to develop them--both in the decrits distribution and the opportunity cost where you could have, say, bought a yacht instead of developing those ASICs.

Minters put in all the effort for only the smallest of rewards, so therefore the reward must be fairly significant for anyone but an attacker to bother. And if an attacker does bother, the algorithm could be changed, rendering the entire operation a complete failure. Reducing the profit motive of the minting system to being one only of opportunity rather than necessity for the network's protection ensures that those with the hardware cost already sunk in, such as everyday GPUs used for gaming, have a huge advantage in amortized costs over those who invest specifically to create money. Reducing the hardware tax. Much more of that $1 goes into the decrits economy than to the electric companies or the ATIs compared to bitcoin. That is why it is important to protect the everyday GPU, because any other option is a complete waste of resources.

ah ha! so your coin is just proof of work, just as bitcoin.