1) I'm assuming you're including the block reward as part of the transaction "cost". That's not a valid comparison, since that is money injected into the network. Even if it was, upon reduction to negligibility of the block reward, that number will drop dramatically. The free market will eventually settle on what makes a fair transaction cost is in absence of a block reward.
Yes, when block reward is gone, that number may drop dramatically, but what then? what about 51% attack? Right now a PoW 51% attack on Bitcoin would cost hundreds of million dollars too, if the block reward is gone, then transaction fees better make up for it, otherwise a 51% attack would become very cheap.
Now if the transaction fee does make up for the block reward, then we are still back to to the original problem, hundreds of millions of dollars bleeding from the community each year, and paid to hardware vendor/electric company.
You're too short-sighted. If Bitcoin is still around by the time the block reward is insignificant to miners, then it's going to be worth a lot more than it is now, and a lot more transactions are going to be pushed through it than are pushed now, upping the reward per block. Transaction fees aside, think about it - the price only has to DOUBLE in 4 years to maintain the same value of reward to miners. In the last 4 years, the price has gone from $0.0025/bitcoin to $500/bitcoin. That's 200,000 times the current value. Now certainly, the value of Bitcoin cannot continue rising indefinitely, but one thing is for certain: if Bitcoin is successful, then block rewards will continue sustaining mining for decades to come. If Bitcoin ISN'T worth a lot more by the time the block reward is insignificant, then the Bitcoin experiment effectively failed, because the current value isn't enough for a significant number of people to be using it for transacting and storing value.
And you've still failed to convince me how money is "bleeding" from the community. What does that even mean? What do you expect miners would be doing with their money if mining wasn't available?
Finally, what's the correct level of security that Bitcoin needs? A 51% attack would be detrimental, but it wouldn't mean the end of Bitcoin. There are ways to counter and mitigate it, and the worst that would happen is a suspension of transactions until the attack is resolved. So, what's to say that $10M of attack prevention isn't enough? Currently it would cost somewhere in the hundreds of millions, but is that really necessary? I'd be interested to see some analysis in that regard.
Do you know what you fail to take into account when you say "the price only has to DOUBLE in 4 years to maintain the same value of reward to miners"? How about the fact that the difficulty is going to be so high in 4 years there will likely not be almost any miners left except 1 or 2 big ones companies. With the difficulty currently at 27,428,630,902.258 and the next difficulty change is forecasted at about 29,612,408,114.79462019(sources from block explorer https://en.bitcoin.it/wiki/Difficulty#How_often_does_the_network_difficulty_change.3F)
Do you really think bitcoin is not goign to bleed all the miners dry? what will the difficulty be next year at the same time? the increase in %change for this next one is about 7.96167048%....If not higher.
sorry i did not go by a specific real date just did 13 days rating onthis and assumed 8% increase everytime.
Difficulty Increase % Date
27,428,630,902 108.00% 09/07/14
29,622,921,374 108.00% 09/20/14
31,992,755,084 108.00% 10/03/14
34,552,175,491 108.00% 10/16/14
37,316,349,530 108.00% 10/29/14
40,301,657,492 108.00% 11/11/14
43,525,790,092 108.00% 11/24/14
47,007,853,299 108.00% 12/07/14
50,768,481,563 108.00% 12/20/14
54,829,960,088 108.00% 01/02/15
59,216,356,895 108.00% 01/15/15
63,953,665,447 108.00% 01/28/15
69,069,958,683 108.00% 02/10/15
74,595,555,377 108.00% 02/23/15
80,563,199,807 108.00% 03/08/15
87,008,255,792 108.00% 03/21/15
93,968,916,255 108.00% 04/03/15
101,486,429,556 108.00% 04/16/15
109,605,343,920 108.00% 04/29/15
118,373,771,434 108.00% 05/12/15
127,843,673,149 108.00% 05/25/15
138,071,167,001 108.00% 06/07/15
149,116,860,361 108.00% 06/20/15
161,046,209,189 108.00% 07/03/15
173,929,905,925 108.00% 07/16/15
187,844,298,399 108.00% 07/29/15
202,871,842,270 108.00% 08/11/15
219,101,589,652 108.00% 08/24/15
236,629,716,824 108.00% 09/06/15
255,560,094,170 108.00% 09/19/15
276,004,901,704 108.00% 10/02/15
298,085,293,840 108.00% 10/15/15
321,932,117,347 108.00% 10/28/15
347,686,686,735 108.00% 11/10/15
375,501,621,674 108.00% 11/23/15
405,541,751,408 108.00% 12/06/15
437,985,091,521 108.00% 12/19/15
473,023,898,842 108.00% 01/01/16
510,865,810,750 108.00% 01/14/16
551,735,075,610 108.00% 01/27/16
595,873,881,658 108.00% 02/09/16
643,543,792,191 108.00% 02/22/16
695,027,295,566 108.00% 03/06/16
750,629,479,212 108.00% 03/19/16
810,679,837,548 108.00% 04/01/16
875,534,224,552 108.00% 04/14/16
945,576,962,517 108.00% 04/27/16
1,021,223,119,518 108.00% 05/10/16
1,102,920,969,079 108.00% 05/23/16
1,191,154,646,606 108.00% 06/05/16
1,286,447,018,334 108.00% 06/18/16
1,389,362,779,801 108.00% 07/01/16
1,500,511,802,185 108.00% 07/14/16
1,620,552,746,360 108.00% 07/27/16
1,750,196,966,068 108.00% 08/09/16
1,890,212,723,354 108.00% 08/22/16
2,041,429,741,222 108.00% 09/04/16
2,204,744,120,520 108.00% 09/17/16
2,381,123,650,162 108.00% 09/30/16
2,571,613,542,174 108.00% 10/13/16
2,777,342,625,548 108.00% 10/26/16
2,999,530,035,592 108.00% 11/08/16
3,239,492,438,440 108.00% 11/21/16
3,498,651,833,515 108.00% 12/04/16
3,778,543,980,196 108.00% 12/17/16
4,080,827,498,612 108.00% 12/30/16
4,407,293,698,501 108.00% 01/12/17
4,759,877,194,381 108.00% 01/25/17
5,140,667,369,931 108.00% 02/07/17
5,551,920,759,526 108.00% 02/20/17
5,996,074,420,288 108.00% 03/05/17
6,475,760,373,911 108.00% 03/18/17
6,993,821,203,824 108.00% 03/31/17
7,553,326,900,129 108.00% 04/13/17
8,157,593,052,140 108.00% 04/26/17
8,810,200,496,311 108.00% 05/09/17
9,515,016,536,016 108.00% 05/22/17
10,276,217,858,897 108.00% 06/04/17
11,098,315,287,609 108.00% 06/17/17
11,986,180,510,618 108.00% 06/30/17
12,945,074,951,467 108.00% 07/13/17
13,980,680,947,585 108.00% 07/26/17
15,099,135,423,391 108.00% 08/08/17
16,307,066,257,263 108.00% 08/21/17
17,611,631,557,844 108.00% 09/03/17
19,020,562,082,471 108.00% 09/16/17
20,542,207,049,069 108.00% 09/29/17
22,185,583,612,994 108.00% 10/12/17
23,960,430,302,034 108.00% 10/25/17
25,877,264,726,197 108.00% 11/07/17
27,947,445,904,292 108.00% 11/20/17
30,183,241,576,636 108.00% 12/03/17
32,597,900,902,766 108.00% 12/16/17
35,205,732,974,988 108.00% 12/29/17
38,022,191,612,987 108.00% 01/11/18
41,063,966,942,026 108.00% 01/24/18
44,349,084,297,388 108.00% 02/06/18
47,897,011,041,179 108.00% 02/19/18
51,728,771,924,473 108.00% 03/04/18
55,867,073,678,431 108.00% 03/17/18
60,336,439,572,705 108.00% 03/30/18
65,163,354,738,522 108.00% 04/12/18
70,376,423,117,604 108.00% 04/25/18
76,006,536,967,012 108.00% 05/08/18
82,087,059,924,373 108.00% 05/21/18
88,654,024,718,323 108.00% 06/03/18
95,746,346,695,788 108.00% 06/16/18
103,406,054,431,451 108.00% 06/29/18
111,678,538,785,968 108.00% 07/12/18
120,612,821,888,845 108.00% 07/25/18
130,261,847,639,953 108.00% 08/07/18
140,682,795,451,149 108.00% 08/20/18
151,937,419,087,241 108.00% 09/02/18
164,092,412,614,220 108.00% 09/15/18
177,219,805,623,358 108.00% 09/28/18
191,397,390,073,226 108.00% 10/11/18
so by the same time next year you can see the difficulty has risen by almost 10 times. 2 years from this date the difficulty would look something like 10 times that, then 3 years later it is something like 10 times that again. how in the hell are you calculating anything other than being bled the fuck dry? miners are already being bled to death at 27 billion... and ur saying when it starts up in 4 years which is 151trillion difficulty that we only need double the bitcoin price? are you high on every drug or something at the same time. get fucking real.