Your second point relies on the assumption that Bitcoin is a closed system. Without people injecting value into the system, Bitcoins would be worth $0. So you are basically predicting that people will suddenly stop bringing money they earned elsewhere to support mining Bitcoin. This point also relies of the opposite of the old Keynes "the market can stay irrational longer than you can stay solvent" quote. If we are waiting for people to go broke to keep the market rational, how long will that take and will the market be able to endure however long it is?
Calculating your (probable) return is trivial, and calculating your cost is trivial. Ergo calculating your profit is trivial.
Mining at a loss in anticipation of a price rise doesn't make sense. If you are mining in anticipation of a price rise and you have the finances to buy and support a mining rig, then you should just take that money and buy coins on the open market. The only people for whom mining at a loss makes sense are people who already have sunk costs in mining rigs.
The idea that the bitcoin market will, in aggregate, not realize this, is far-fetched at best.
How does that work, exactly? I thought that the only reward that the miners get is the block reward hard-wired in the system. Is there another mechanism that allows them to negotiate transaction prices with clients and accept/decline transactions?
Currently transaction fees are negligible compared to the block reward. Many miners are willing to process 0 fee transactions because it hardly costs them anything and promotes use of the network. However this will change over time as the block reward declines and transaction fees become more important.
Of course, the huge problem here is that there is only an incentive to add substantial fees if the number of transactions is larger than the maximum the network can handle. If they increase the blocksize to allow for more transactions per minute then there will be less incentive to pay fees. The fee system is also not very friendly to microtransactions because its not percentage based.
The specifics of that might not be quite right.
But a transaction generally specifies some amount which goes to whoever mines a block which includes the transaction.
If one wants their transaction to be included in a block more quickly, one can include a higher transaction fee, so that miners have a greater incentive to include your transaction in a block compared to other transactions.
I am fairly sure that the above is basically correct, but not entirely sure.
I don't actually own and have not used bitcoin, I'm just interested in the space.
3620 bitcoins buy a lot of electricity for sure. But it won't always be like this! The block reward halves next year, and transaction volumes will probably increase. Then rational miners will spend perhaps around 1830 bitcoins on electricity per day, while processing more transactions. Wow, we've more than doubled the efficiency in a year!
Furthermore, the block reward keeps halving every couple of years until it goes all the way to 0! At that point, the only thing funding the miners will be transaction fees, so the full costs of running the network will be borne by the users, and market forces will decide the appropriate level of resources to spend on running the Bitcoin network. It could be higher or lower than 215 MW, depending on how useful Bitcoin becomes to users.