This of course may mean the whole scheme fails. If people do not view any of these side chains as secure, no one will ever exchange in. You might need a floating exchange rate (i.e. altcoin) to allow people to price the risk.

Exactly equal or proportional? The latter seems fine.

It's an interesting point. How is the constant of proportionality determined, and does 0 count?

If the problem of distribution is fixed in a PoS coin in such a way that nobody feels that they are getting a rough deal then you could have something. The problem with coins that have very few stakeholders is lack of liquidity. The problem with coins that give out their coins to too many people is lack of early adopters.

I'm not sure I'm following your question.  The Ethereum developers will apparently distribute the pre-mine by selling some of it in exchange for bitcoin during an IPO event and keeping the rest for themselves.  This has many people questioning their motives.  The spin-off clone aethereum is an exact replica of Ethereum with the exact same % pre-mine, just distributed according to the spin-off principle.  

There are plenty who are proposing it.  That's both the beauty and confusion of open source alts at this stage of the game.  We could end up with Etherium -the-original-with-premine, a number of zero-premine clones, at least two spin-off versions (æthereum and ɯnǝɹǝɥʇæ) and one or more side-chain versions!

Fairness is subjective.  

What we know empirically is that the distribution of coins in bitcoin is efficient.  It has been tested by the market over 4 years and over 1,000,000% increase in price.  

My premise is that an alt-coin launched using the "spin-off" technique would naturally out-compete the equivalent alt-coin that used a different method for pre-mine distribution, all other variables being equal.  The reason I think this is that the spin-off technique distributes the coins widely and in a manner that we know is efficient for bitcoin.  This provides the spin-off immediately with (a) a large potential user base, (b) a large potential pool of liquidity, (c) a large number of "holders" (as most bitcoin users will be impartial to this idea).  

This is not a debate about fairness.  This is a debate about what would actually happen and one that can only be answered with the benefit of hindsight.  

that is an assumption that is not necessarily true but may be exactly the way it plays out.

Peter is saying let's see what the market decides.  altcoin's have nothing to fear if they are innovating with the right intentions (subjective yes).  his proposal should make altcoin devs think seriously about their own motives as to why they're introducing an altcoin.  if there's true innovation that is meant to benefit the community, they will be rewarded richly, as they will have the most insider knowledge of just how good their altcoin is (or isn't).  the way they will do this is that b/c of this asymmetric knowledge there will undoubtedly be Bitcoin naysayers from the free altcoin distribution who will dump their new found "free altcoin" for cash or other coin on the open market.  the devs are then just as free to scoop these up at bargain prices.  as the altcoin grows and matures they will become rich.

i like this method much more than Sidechains b/c it totally separates these altcoin/schemes from the Bitcoin protocol which will have to be changed to implement Sidechains.  that is risky and complex. Spin-offs are cheap, simple, and no risk.

it's a beautiful play on economic incentives.  

Also tech-savvy bitcoiners will hold/scoop them, and so we have a nearly instant gauge of market valuation, which will reflect on exchanges. So the initial distribution does not really matter much.

I hope Ethereum or some other unique altcoin devs will first take up this proposal voluntarily so we'll have a proof of concept. The clone route is a bit nasty.

actually, the initial distribution makes all the difference.