Has anyone used difficulty to get constant-dollar developer or node fees? Difficulty is exactly proportional to network hashrate, and network hashrate is closely proportional to coin price.
Say a coin is currently $1.23 and someone wants to get a fixed income from the coin like $0.01 each time something occurs. To achieve this they could use a constant that is multiplied by the difficulty:
Dollar value here is constant-value relative to when the ratio was determined (when difficulty was at $1.23). If hash power is not able to keep up with coin price (which is a temporary effect), the value would be larger than expected. Otherwise, the real-world value slowly decreases as hashing efficiency increases, which may be a desired effect if it is for dev fees because software gets outdated. But Moore's law has gotten very slow for computers. Hashing should get closer to being a constant hardware cost per hash.
Also, electricity is more than half the current cost of hashing and could soon be 3/4 or more of the cost. Worldwide electricity cost is very stable and possibly the best single-commodity measure of constant value.
The metric might be useful only when the coin is being used as payment, but any long-term contract needing constant value (such as employee/employer contract for salary) could get paid in an inflationary currency or in any other cryptocurrency that has an exchange with the coin. Neither employer nor employee need to use the coin or the exchange because the amount paid (as specified in the contract) would just depend on the initial ratio and current difficulty. The employer would need to argue for a higher ratio and the employee would need to consider if the future price/difficulty ratio might decrease.
The metric is not as good as basing contracts on an index of world-wide electricity cost, so it would mainly be used if payment needs to be in that coin. It connects the coin to the outside world, without depending on a 3rd party like an electricity index.
Has anyone used difficulty to get constant-dollar developer or node fees? Difficulty is exactly proportional to network hashrate, and network hashrate is closely proportional to coin price.
Say a coin is currently $1.23 and someone wants to get a fixed income from the coin like $0.01 each time something occurs. To achieve this they could use a constant that is multiplied by the difficulty:
fee = 0.0123 / difficultyat$1.23_per_coin current_difficulty rewardat$1.23 / current_reward =~ $0.01
Dollar value here is constant-value relative to when the ratio was determined (when difficulty was at $1.23). If hash power is not able to keep up with coin price (which is a temporary effect), the value would be larger than expected. Otherwise, the real-world value slowly decreases as hashing efficiency increases, which may be a desired effect if it is for dev fees because software gets outdated. But Moore's law has gotten very slow for computers. Hashing should get closer to being a constant hardware cost per hash.
Also, electricity is more than half the current cost of hashing and could soon be 3/4 or more of the cost. Worldwide electricity cost is very stable and possibly the best single-commodity measure of constant value.
The metric might be useful only when the coin is being used as payment, but any long-term contract needing constant value (such as employee/employer contract for salary) could get paid in an inflationary currency or in any other cryptocurrency that has an exchange with the coin. Neither employer nor employee need to use the coin or the exchange because the amount paid (as specified in the contract) would just depend on the initial ratio and current difficulty. The employer would need to argue for a higher ratio and the employee would need to consider if the future price/difficulty ratio might decrease.
The metric is not as good as basing contracts on an index of world-wide electricity cost, so it would mainly be used if payment needs to be in that coin. It connects the coin to the outside world, without depending on a 3rd party like an electricity index.