Well, it might not be. But just in case it is, I'm going to write down my logic. Maybe we can all bash on it and see where the logic takes us.
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I think those rules tend toward some wandering equilibrium measured against the cost of electricity. I'm not totally sure of the exact function.
What does anyone else think?
I may be wrong, but I believe this sytem is flawed in the same way Encoin is. It assumes an equation will remain constant over time but it is more likely that it will vary. I'm referring to the assumption that an increase of X in difficulty will equate to an increase of Y dollars in the cost of mining. In the future that equation may change to X*1000 difficulty = $Y in cost, so because difficulty can only adjust linearly then at some point it will start playing catch-up with technological progress and so hyperinflation will ensue because it will always be profitable to mine.