Moreover, arguing for an unstable regime without so much as a damping feedback loop ti mitigate divergence doesn't inspire me with visions of success...
(2) compute the time to value divergence as a function of econometric parameters.
That is a more high IQ explanation of what you were thinking in terms of "exponential blowup".
We need to enumerate divergence scenarios due to an exponentially scaling nominal size of expenditures on mining.
One is that mining becomes centralized, so we collectively are being siphoned by the few. That is probably the main concern for divergence?
But in that case, we've lost control of the coin any way and the government can take control of the coin and change the protocol as they wish to a fiat where they siphon us (where Bitcoin is headed with one or two pools controlling > 50% of the hashrate, once the G20 coordination on the Global Police State tracking of tax offenders reaches full implementation 2016 - 2020ish).
Currency will always be heavily debased because the people demand to use a currency that is debased (if your coin doesn't they will shift to a coin that does). Thus we had better focus on keeping the mining decentralized.
