There's more than a little of the economists "inefficiency is good because it creates employment" argument in that article. First the argument that the coin is backed by the cost of coin creation, that the energy used to create a coin gives the coin value. How about a renewable energy network that rewards you with a coin for every $100 of electricity generated, sounds legit? Ok, so on one hand you get a reward for generating $100 worth of electricity and on the other you get a reward for consuming $100 worth of electricity, are both of them legit? It seems like one of those is credit based and the other debt based but I'm not sure which is which.
If it is true, that the cost of creating a coin gives it value then it could come in useful. How about a special transaction that takes the value of the inputs, multiplies them by the difficulty, stores the resulting value and zeros the inputs (destroys the coins). Sometime in the future the transaction is reversed by dividing that stored value by the difficulty at the time and creating that number of coins. Voila, you've just created stable savings by storing them as a value representing the energy used to create the coins, if the difficulty genuinely follows the price based of the cost of creation then that transaction will be worth the same regardless of the dollar price.
It seems hellish wasteful though and I can't believe it's sustainable. Not everyone will perceive the cost of creation as absolutely essential to the coins value, folks believe in the value of pieces of paper that cost a few cents to create so if a network can offer exactly the same properties with lower overheads wont it win out? And it seems like the fundamentals of security mean that's possible. A coin starts out worth nothing, folks donate lots of computing power to get it started and the cost of hardware makes it prohibitively expensive to attack. If the masternodes handled all security then that fundamental, security derived from the cost of an attack hasn't changed, only the method has.
That's an entirely different form or proof of stake to the one mentioned in the article, maybe calling masternode collateral "proof of stake" is the error there, these "proof of..." terms may be a little too general for all the potential methods.
His other main point is distribution and I think that may be the next phase of that bootstrap process, not sure how yet but I get the feeling "proof of adoption" might be the next step. Distribution by proof of work is fine when folks can mine on a PC but when the market squeezes and all the rewards end up going to a small handful of huge mining farms then the situation is far from ideal. In light of that the proposal to promote Dash in Venezuela by a referral handout seems like a far better option, I'm not sure how distribution by referral could work as a method of coin generation but it would probably be the fairest method possible.
@babygiraffe said this is exactly one question that the dash treasury should fund research for. No one was suggesting none at all, as mining is an important part of the security model. But If research shows we have 50 X more mining security that we need then the % of rewards that goes to miners can be reduced.
This would have to be done with great caution and moderation and sanctioned by the masternode operators.
Folks can pay me for thinking about this stuff anytime, I'd make a bleedin' fortune
Yep, no one was suggesting none at all and it was starting to feel like that was a 400lb gorilla in the room, everyone keeping quiet for fear of looking stupid maybe. No fear of that here, stupid questions often give rise to inspired answers.
Either I'm missing something obvious or mining isn't essential. I do believe that getting rid of it (and its huge energy cost) would do a lot of harm to the credibility, that the cost of creation is widely perceived as giving a coin value but that it wouldn't actually break security so long as the cost of attacking the masternodes is prohibitive.