Doesn't this seem counter productive? If people stop mining, and the remaining miners get less coins, they will have little incentive to continue mining, so they will stop and move to another coin that is more profitable. Hastening the leave of the remaining people mining because they will get less and less as more and more people leave.
The opposite being, that since it produces more coins if you mine on it with more hash, that it will dilute the value further and make the existing coins worth less.
It's the worst solution I can imagine.
I think too much effort is being focused on getting people to mine the coin. The miners don't make the coin valuable. The miners just dump the coins for cash to pay for expenses. If you want to improve the coin, you have to make consumer focused features. Give people a reason to use the coin or hold the coin. Otherwise you have people just mining worthless coins. Might as well just release all of them to everyone in a lottery and save the environment the wasted electricity.
You'd be better off providing the "bonus" to people who hold coins. That will at least improve the scarcity of the coin and make them more valuable.
I can print paper coins on the copier all day, but they are still worthless.
The remaining miners shouldn't be left in that situation as the formula will adjust to provide closer to 240 HIRO per block if the low hashrate becomes the "norm". Your case also assumes that there are no buyers in the market. In the case that the reward drops, the coin supply drops making it that much easier for buys to maintain or increase the current price which would draw the miners back as mining HIRO would become profitable.
In the case of more coins with more miners, we'd reach the max reward of 400 HIRO and eventually close in on 240 HIRO if the high network hashrate becomes the "norm". Also the "high" block reward of 400 that would supposedly dilute the value further for HIRO is no different than our current block reward.
Creating further demand through services and consumer focused features is the goal after the block reward modification is complete. The block explorer implementation into the wallet and a PoS page for merchants and users to use Hirocoin as their preferred payment method are next on the list.
It remains to be seen how this whole thing is implemented and whether people find a way to game the system or not. If I own a huge farm, I might wait for the diff to drop then get in creating much bigger hash than normal and get the 400 block rewards for some time then after the new hash becomes the "norm" and rewards start decreasing, I will just leave and wait for the new low hash to become the "norm", then rinse and repeat. Not sure if I explained the idea well enough.