I've seen posts by several folks recently that are starting to mine yacoin on CPUs are running into very disappointing returns. Especially for a coin as new as yacoin, this could be an issue that hinders adoption. I think that possibly the N adjustments have been coming a bit too fast (or the block reward is too little) too early on. I see the difficulty is continuing to drop after the last N increase, but I wonder if that will be enough. The coin still only has a circulation of a bit over 3MM with about half of that being amassed in the top 10 addresses. Yacoin's unique CPU potential aside, the viability of any new currency lies in its ability to be distributed initially in as wide and efficient a manner as possible, rewarding early adopters but also encouraging newcomers to adopt it as the monetary base expands. I fear we may be turning some folks off to the coin. The expectation is that these folks not think they're becoming "rich", but more get more of a reward than 10 cents worth of coin for mining it on their CPU for a day.
I think the problem probably doesn't have anything to do with what N is or what hash rates people are seeing. If everyone vacated mining YAC and left it stranded at a high difficulty with block times measured in hours, as has happened with a bunch of the other scamcoin pump'n'dumps lately, then it would indeed be a problem. But I think what we're seeing is that interest in mining YAC is high, hash rates are staying up, and tend to hover right in the range that power costs for CPU mining remain at break-even or slightly profitable. That's probably what should tend to be expected for CPU'ish coins (until someone releases a GPU implementation that actually performs well). If we were in trouble with the YAC parameters, it would be something like the N increases outpacing the amount of hash rate people are committing to it and stranding us with really high difficulty and massive spacing between blocks. So far YAC has proven to be resistant to that effect that has crippled most other recently released altcoins.
If the block rate is X, and the reward is Y, then the amount of people mining it (or more accurately, the amount of hash power mining it) will self-regulate to a state of breaking even or slightly profitable with the block rewards being split up among a large enough number of people (or units of hash power) to maintain that state of equilibrium. I think this would remain true regardless of what N is, or even if N were hard-coded to a fixed value. In this case there aren't really other good profitable choices for people to point their CPU's at, so it tends to however close to break-even.
If the coin parameters were changed to increase the reward to make it more appealing to new entrants that have only a small amount of CPU power, that will just drop the value of the coin, and devalue all the YAC anyone is already holding. That's sorta what some portion of the Elacoin miners wanted to do, modify the parameters to jack up their rewards, and I pretty vocally opposed it (as I do hold some ELC and occasionally point a GPU or two at mining ELC just for the fun of it). Fortunately they did not significantly change the block reward mechanism in the end.
So I think the problem isn't that N is too high or that CPU's yield a certain amount of hash rate for a particular value of N. That affects everyone mining the coin and so far, it appears tends to close the gaps between CPU and GPU mining (contrary to some early people saying GPU's would widen the gap at high values of N, which doesn't appear to be the case). Instead, the problem is that the amount people are willing to pay for YAC is low right now, thus the value is low. That itself isn't really controlled by any of the parameters of the coin, it's more controlled by less enthusiasm among cryptocurrency speculators lately.
This issue has two possible solutions: tweaking the coin parameters down the road a bit, or continuing to work to increase per-coin valuation through other means. The first could backfire, however. What is everyone's opinion on this?
I think changing the coin parameters is probably a very poor idea. There's nothing really wrong with any of them that I can see. Changing parameters and hard-forking the blockchain with an incompatible client, with changes that would tend to devalue the YAC that anyone is already holding, may be a difficult proposition for anyone already holding YAC, with other unintended consequences. Plus it doesn't really reinforce confidence in a coin if they have to periodically change parameters, particular parameters that will devalue existing coins. There's a good chance here that YAC may be one of the only recently released altcoins that does *not* need a hard fork to change parameters.
Note that the N changes are becoming farther and farther apart, so there's plenty of time for things to reach equilibrium between them. Block rate will probably be at the target rate long before the next N change. A few more N changes down the road and they'll feel like a pretty rare occurence with just minor short-term increases in block rate until things re-equalize.
