We need only 19 witnesses, not 500. I don't want any less-than-awesome witnesses in that small group just because they offer a low bid. I think we can easily find 19 awesome witnesses each of whom can receive -- and put to good use -- 5% of the budget to operate the infrastructure, sponsor development of the wider platform (including supporting services and alternate clients), and provided needed gap-filling ecosystem services such as abuse-control.
If there are witnesses you think suck, vote them out. The OP suggests that its all rigged and witnesses can't be voted out, which is flat wrong. The stakeholders voting witnesses in or out are not stupid or suicidal, and in the most cases it is not the witnesses themselves. The whole premise of the post is just poorly researched and wrong. The OP itself points out some new (good) witnesses who have been voted in. By definition someone being voted in means someone else is voted out.
If more need to go out, then support some more new good ones in. We can find 19 awesome witnesses if we don't have them already. Take care though, not to assume that witnesses are "not awesome" just because you, personally, happen to be not be fully aware their contributions. I fully admit that their are 5 witnesses that I'm not sure what they do, but I don't immediately assume they are dead weight. OP apparently makes this mistake as well.
Where do you get 5% from? I thought it was 25% from the white paper. Also, don't you get a 1 steem per block? Once you have that steem don't you get a shit ton just from inflation?
5% seems totally reasonable for a developer team paid by the system to do work. I agree it's more than we should be paying for hosting a node, but fair if you guys are doing a lot more than hosting a node. That said I was under the impression it's much higher than 5% so can you help me understand the actual amount?
5% each of the total witness reward budget. Technically it is 1/21 (4.76%) but 5% was a round number.
The total witness rewards (for all) goes to 0.75% of market cap per year in the white paper (and I assume code altough I haven't checked it). That strikes me as a very reasonable amount to pay not only for the literal infrastructure but also ongoing secondary services and investment, if possibly low. There is no other source of funding for any of these things, so long term all must be included or they won't be paid for.
Not really. Inflation is both a gain (in nominal units) and a loss (in value per unit). You don't make a pie any bigger (nor the value of a portion, say 2%, of the pie) by making the slices smaller and smaller.
I would like to restructure things a bit so this massive inflation no longer exists, as I don't think it is really necessary, but doing so won't change the fundamental economics much if at all, just the numbers (perception).