Hey, author here - I think you're absolutely right that there is a risk that demand for blockspace doens't generate sufficient block reward to provide useful security guarantees. If that is the case, it could cause the price of BTC to fall which could create a negative feedback loop. This would, at best, create an end of the 21m cap and at worst trigger a collapse of the game entirely.
Is the plan to secure a fully-mined chain just rampant value-inflation in a way that is completely detached from supply and demand? Today my 1e-1000 bitcoin is worth 10 carrots, tomorrow it is worth 20 everything else held equal? How does that even work in practice?
Alternatively you need transactions to pay entirely for the security of the chain. This doesn't seem feasible when chain security costs rise everyday as the cost of energy deceases. And if transaction fees increase to compensate and people transact less the whole thing blows up.
The "official" plan is for low-value transactions to happen on the Lightning Network and high-value (e.g. >$1M) transactions paying high fees to happen on-chain.
Lets assume they solve all the math challenges with the routing: The on-boarding is still a challenge as it demands one initial on-chain transaction.
If 10% of the current facebook users want to get on lightning and we can make 6 transactions per second it will take 17 months before all are on board - and this is assuming no other types of transactions (so any payment made with BTC will delay this)
Many people (me included) would consider Bitcoin to have failed at that point. It's pretty clear that the ecosystem believed in the cap, and removing it is a bait-and-switch.
Given we're currently floating around 10-15% fee-supported at the moment, I'd say most people are optimistic that we will succeed in moving Bitcoin into its final economic phase (i.e. in 10 years it will be 50% fees).
This is why the original design focus on fees in great volume to be the main incentive to be a miner and using the block reward as both A) a way of distributing the original minting of coins and B) a transition mechanism until volume is so large that the fees can sustain the miner incentive.
A very simple way to increase block rewards is making blocks SMALLER.
It is game theory: If you really want your transaction to be on-chain, you pay for it. And smaller blocks means less transactions will fit in one block. So fees will need to go up.
In theory... but demand has elasticity. If the market has no way to equilibrate at a state that produces sufficient returns, there's no constraining of supply that can produce the returns needed. And that is the risk/unknown.
