Good point and I agree there are problems. All I am doing is proposing the best I can think of. How would you do it? Bitcoin now is basically Satoshi wrote the rules and everyone follows them. All I'm proposing is a system where people can easily "dissent", make their own rules, and if enough people follow, actually change things.
How would I do it? I like how Bitcoin is now.
And you are wrong when you say that people just follow what Satoshi wrote. People like what Satoshi wrote or otherwise Bitcoin would not have the success it has had. If a big part of the people liked another way they would have already started a competing currency. There is nothing stopping you from creating your hashcoin. Satoshi even gave you the open source code so you only need to change a few lines of code and you are ready to go.
I don't understand this part but I want to. Could you link me to something that explains this further?
I really dont know how can I explained more clearly, but Ill try. I am saying that having a price index (no matter what you decide to include or how to calculate that index) does not guarantee you that the monetary system is not creating distortions in the economy. As an example I signaled the roaring 20's. So saying that as long as some price index that you deem appropiate will remain stable is not a guarantee that a monetary system you propose will ensure economic stability.
I disagree with both points. I think both of these problems are caused by the following fact: The price per CPU cycle on average is fairly consistent to people. But bitcoin is priced so 1 BTC generation costs not 1 cycle, but rather proportional to total cycles in bitcoin network. The latter quantity is quite inconsistent. You can see this in the markets: as collective power has stabilized, price has stabilized. When difficulty went from < 100k to > 1M was when the massive price swing took place. Pricing a bitcoin now essentially involves conjecturing the future network size, which is what makes it extremely difficulty to do.
The problem with your hyphothesis is that price has been stable way before the hashing power stabilized. In fact, hashing power is starting to rise again since yesterday.
Even if you took the time to analize it econometrically (which I believe you havent) I dont think you will find a clear pattern relating hasing power and price, because basically hashing power does not change almost the supply of coins (big increases accelerate very slightly the supply until difficulty adjusts again) and does not affect the demand. This is why we see in reality that increases in price always leads to increases in difficulty (because hashing power has increased).
Both theoretical analisys and empirical data are against your hypothesis. Its important to keep in mind that supply and demand of bitcoins, and thus price, are not affected by hashing power (supply slightly). Instead the incentive to mine it is indeed affected by the purchasing power of bitcoins.
Second, people are not thinking this way out of dislike for anything bitcoin like. It is indeed because they feel it is unfair that the coins they make now that cost 1M times as much to generate are worth the same as those who generated years ago.
Well, Bitcoin is not a system to get rich, its a currency. Its meant to be used to trade. People should understand that mining is a market with a very low barrier of entry, almost anyone can do it, and will be, more and more as time pases, a very low yielding activity due to competition. If you want to prosper in the Bitcoin economy you will have a lot more success trying to create a business than going the miner route. This is also a good incentive.