yes we have to move forward to PMC2. How can POS work when there is only a limited number of coins?
I think I get what you are asking. Technically it won't "work" until such a time as we sign up a developer and he modifies the protocol to assign tx fees to stakers instead of destroying them. The PoS rewards are there in the meantime to simulate the fees that you would have received. This will give us a maximum of a year to find someone capable (more than enough time).
So, it starts off PoS with % interest. Then the interest ends and people still stake, but instead of getting interest they get transaction fees. This returns us back to the original concept. Unfortunately we have to switch to PoS interest until we get back on our feet and can implement that change.
After careful consideration I think the tx fee should be a percentage of total transaction amount (for example .01%). This way it scales with rising and falling prices.
For example: if the price is high, sending 1 coin with a tx fee of .0001 is fair.
If the price is low, sending 10,000 coins with a tx fee of 1 is fair.
The more fair alternative is to hard code a max amount (0.01% up to a max of X, where X is an arbitrary amount we set in the wallet based on the average price). This would require updating the wallet continually with the current max fee amount (maybe once a month), but would be more egalitarian and fair.
I welcome any arguments on this fee structure.