Basically, the blockreward can be seen like a set of training wheels that keeps bitcoin up and running.
Long ago it was decided that Monero would take an alternative route, wherein having those wheels available to prevent the bicycle from falling over is good, and the tradeoff of having an infinite supply of monero is acceptable.
Tiny wheels, tiny infinity.
Thats interesting... Never thought of it like that before. So the 1mB block size is a hard set rule and the miners will always hit that (considering how many txs there always are ) and arent dissuaded somehow against ever going above 1 mB due to some game theory?
yeah, thats the fundamental concept of transaction fees set out in the bitcoin whitepaper
Once a predetermined number of coins have entered
circulation, the incentive can transition entirely to transaction fees and be completely inflation
free.
in bitcoin, yeah, there is now a 1 mb block size limit, and in general the incentive to keep it that way is to create a fee market. If you want to get into the next 1 MB block, then your gonna pay for it.
The fundamental problem with Bitcoin's so called fee market to replace the block reward is that there is zero justification for the above statement in Bitcoin whitepaper. The fact that this statement was embedded into what is otherwise a work of genius does not make the statement true. It also does not provide any justification for the game theory that statement implies. In fact there are many arguments that this fee market will not work in the absence of a block reward or where fees become the dominant source of revenue for miners.
One very interesting argument for the failure of the Satoshi fee market is actually in Monero itself. If one looks at a miner acting in her best interests adding transactions to a Monero block, the miner will add the highest paying transactions first. This can be approximated by the highest fee per byte transaction first if the individual transaction weight is very much less than the effective median block weight. When the penalty free portion is used up our miner will continue to add transactions until the incremental penalty paid for adding a transaction exceeds the fees paid by the transaction. Since the incremental penalty is proportional to the block reward it follows that the total fees per block paid are also proportional to the block reward. Competition between miners will ensure that. Furthermore the total fees per block are independent of the block weight.
The net result of this is that if the block reward goes to zero the total fees paid per block also goes to zero. One conclusion is that in a Bitcoin like coin with a falling block reward in order for the Satoshi fee market to even have a chance of working the penalty in terms of the block reward for increasing the block size (weight) must be stiffer than that in Monero. One can then see the rationale for Bitcoin core's strict block weight limit.
Edit: One interesting anecdote: Fees in Monero are actually based upon the above.