Hi guys.
This has probably been discussed already but for the life of me, I cannot figure a search term to use that filters out irrelevant stuff.

Anyway, the latest block size debate has had me thinking about various inevitabilities.

What happens, specifically to the price of Bitcoin and transaction fees when the block reward drops to a negligible amount?

Let's assume tomorrow is the day that the block reward drops to 0.00001 BTC. Now, the entire mining process has to be subsidized by transaction fees. So far, so good. This was by design. However, at (I assume) 4000 transactions per block currently (I could be way off but let's go with that for now), that would mean that at today's BTC exchange rate, for miners to break even, transaction fees would need to be close to the same as the block reward for miners to bother. Let's keep it even, that would mean, at $300 per Bitcoin, the average transaction fee would have to be $1.87.


Current fiat reward for miners operating at close to break even: 25 btc* 300 usd =7500 usd
Transaction fees required for the same mining power to run the network: 7500 usd/4000 trx = 1.87 usd

Now I'm making some serious assumptions here, I get that. But at today's exchange rate/Bitcoin value, that puts  Bitcoin out of business in terms of being an affordable way to make everyday transactions, especially micropayments. Granted, for larger sums, this doesn't seem like a big TX fee at all.

Now I know that block size is mutable so does this mean it's inevitable? Or does it mean that the price of BTC will have to rise to at least the cost to mine a block divided by the transactions per block multiplied by the exchange rate to be worthwhile? Doesn't this then mean that the value of Bitcoin outside it's functional value, is then ultimately determined by the block size which markets ultimately don't have control of?

Would love for someone to clear this up for me. I'm obviously missing something. For the sake of explanation, it would be good to assume that we live in a world 40 years from now where there is either no block reward or that it's so negligible that the block reward could be considered a cup of coffee. Does BTC fiat price increase to meet the collective cost of actually hashing the transaction block or does the total block transaction fee value determine it?

Would love to get some input here to help me understand. If this has been discussed before, Apologies. I'd appreciate if you could link me to the previous discussion.