Hi - I'm the guy who gave the talk.  Just made an account here to reply.

Franky1- I seem to have touched a nerve.  I'm hesitant to address your posts at all (referring to this idea as "a basement dwelling freeloader's wet dream" makes it clear that this isn't any kind of rational debate) but will optimistically respond to the post to the extent possible.

I don't understand your "bad actor" scenario.  There is no reason for a miner to "contract with themselves", because the contract transactions are not made public, and don't appear on the blockchain until one of the two nLockTimes becomes valid.  Why would you send coins to yourself?  Nobody sees the proof of power responses except the node creating the bounty.

Also, if smaller miners who were hoping to idle their hash power and receive a bounty see that the network is running at a high rate, they will assume the bounties will not be fulfilled and adjust their hash rates to the optimum without a bounty payout.  So if at 00:03 am, some mining pool starts running full blast, well, everyone can see that, and the whole PoI contract is off, mining continues as before, and the bounties are returned to the sender a few days later.  The argument of this talk is that this is not an optimal choice for a large miner to make.  Granted, many miners are not rational and can try to do dumb things.  This doesn't address that, and assumes rational actors trying to maximize their bitcoin income.

Sorry if this wasn't clear in the talk, I'll try to have a nice PDF of it out soon.  The slides linked on the youtube page explain most of it though.

This does not help with decentralization at all in fact.  I'm not advocating this idea, I'm just saying that my research has indicated that it is possible, optimal, and likely to be inevitable if the right conditions are met (mainly a low opex profitability and somewhat stable network with large mining entities).  Miners would still need to have equipment to pose credible threats to mine, but would not have to mine at full capacity.

(Also this should possibly be moved to Development & Technical Discussion, but I didn't create the thread.)

I'll post responses tomorrow if people have other questions.  Thanks for the interest!