So this is not written from scratch, basically modified Crypto-note. Is it like Scrypt change into Scrypt-N?
Exactly this we wrote in announce:
....Cryptonote represents absolutely new code, made from scratch,....
Let me explain our approach to hashing: main idea of cryptonote hash is to have memory consuming algorithm (2MB scratchpad) coupled with more complex instructions set - considered that it protects from ASIC. But it makes hash function works really slow, that is bad for connectivity - slower blockchain synchronisation (PoW for each block takes avr 400ms, because used to cover whole scratchpad), and it is bad for security - it is possible to make attacks via burning your CPU for nothing (sending of fake blocks).
We've decided to use blockchain as scratchpad (with salt of course) coupled with fast version of cryptonote hash(or not) (reduced scratchpad to 130kb, and with reduced scratchpad we able to reduce iterations count). It is two-phase hashing - in first we make extra-fast hash to discover pseudo-random data addresses (indexes), and in second: we do actually hash with the salt based on first extra-fast hash. Since blockchain is always grows up we belive that it will be almost imposible to make effective ASIC. On the other hand, it will make mining process effective with complete node, so we killing two birds with one stone - make ASIC-resistant hash and gets more full nodes in network (even with pools).
Hope this is clear. If not - feel free to ask.
PS: I'm very sorry for my terrible english, my native language pretty different as well as my way of thinking. So, i ask all native english speakers to forgive me)
Hope the language of ideas and "rocket since" will make mutual understanding more simple and easier.