So please have at it, thoughts, criticism any ideas on how this can be made to happen.
there is a scrypt gpu miner, and i could not see why you couldn't merge mine the scrypt coins.
I don't have a problem with merge mining per se, just in the very beginning while difficulty is low a giant pool merging and denying transactions is a problem. Right now the scrypt coins don't have support for MM so i figured it would make sense to use it.
If someone invents a machine that does 100Gh/s on 1 watt and costs 10 USD everyone would go out and buy one. BitCoin would adjust quickly but a reward based on difficulty system would generate coins at some crazy high rate inflating away the value of all existing coins.
You are better off with fixed rewards per block. Difficulty will adjust the production rate and the free market will adjust the trading value.
You make a good point there with the 100gh machine. The problem i see is that difficulty with fixed rewards does not scale with the number of participants very well, and has repeatedly driven the value of coins to near zero. I guess one way to go is a very low block reward.
Actually, is it possible to count users accurately while retaining anonymity and base block reward on that?
Or maybe base the reward on difficulty but have built in maximum as well.