You couldn’t be more wrong about what you are saying. Bitcoin has zero long term answers for what happens when the block reward isn’t enough to secure the blockchain in the future.
the paper you linked hand-waves away this for some reason, either to suggest that interest in bitcoin is purely speculative (which to be fair would only be half-wrong), or ignoring that market forces put upward pressure on transaction fee cost.
so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: https://buybitcoinworldwide.com/stats/fees-percent-of-reward...
of course it has. I am not talking about the proportion of block profit, I am asking how you expect the total block profit to stay the same from just fees. The network will have to survive when the proportion will eventually be 100%
the transaction fee isn’t some algorithmically determined value, it’s completely controlled by market forces (for better & worse).
there are plausible arguments for transaction fees greatly exceeding even the original coinbase amount, although ultimately what matters is the value of those fees in local currency, contrasted with the cost to mine the block containing them.
I'm not sure the fees will actually change a whole lot if denominated in BTC. I just expect that when 1 BTC is worth a lot more than it is now in fiat, people won't be paying for their coffee on-chain (assuming inflation doesn't do crazy things to the price of a cup of coffee!).
Okay, but those LN transactions clearly depend on the security of their multisig channels without subsidizing the miners through the fee market.
The one asterisk that needs to be added here of course is that with sufficiently low difficulty, a double spend attack becomes more viable, but this is a somewhat overblown threat. It's low reward, extremely high cost, and 'easily' undone if the market so agrees. It shouldn't be ignored, because it is indeed a threat, but at the same it's also kind of a 'meh' threat.
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edit: And for those who are may not be aware. Even once the final Bitcoin is mined, miners will continue mining - something which may be counter-intuitive. Whoever mines the block will get no coins, but will get all revenue from the fees attached to whichever transactions are processed.
That is my point- that equilibrium point will eventually be low enough that 51% attacks, selfish mining attacks, etc. become feasible and highly desirable to execute.
>It's low reward, extremely high cost
It is currently low reward/high cost. But it will eventually not be.
>and 'easily' undone if the market so agrees.
False. Bitcoin has not made a hard fork in how many years? Can you make a hard fork faster than the attacker can "cash out" to crypto-crypto exchanges? Highly doubtful.
>Whoever mines the block will get no coins, but will get all revenue from the fees attached to whichever transactions are processed.
... which is dependent only on the fee market, and currently amounts to a small fraction of total block reward.
Mining is a liquidity service, therefore it only makes sense that the holders of the liquidity pay for it.
You couldn’t be more wrong about what you are saying.
[0] https://ethereum.org/en/staking/
[1] https://ethereum.org/en/upgrades/merge/#merge-and-shanghai
[2] https://www.coindesk.com/tech/2022/10/14/censored-ethereum-b...