Bitcoin Security Budget Argument

I recently had a back-and-forty with some Ethereans about the Bitcoin Security Budget. Their claim was that Bitcoin’s network is getting less secure because block reward is decreasing and transaction fees are low.

I said that claim was not empirical because it ignored the fact that hashrate is going up, and as hashrate goes up, Bitcoin gets more secure.

They basically said, “Nope, hashrate also goes up because compute gets cheaper, so just because hashrate goes up, that doesn’t mean Bitcoin is getting more secure. The only way to measure security is to look at the value of the block reward plus transaction fees (the Bitcoin Security Budget), and block reward is getting smaller so Bitcoin is getting less secure.”

My response: Okay, fair enough to say that compute gets cheaper, so hashrate going up is not 1:1 increase in cost to attack; however, to say Bitcoin security budget exactly equals block subsidy plus transaction fees is not necessarily true because people or entities may choose to spend more on hash than the amount of reward plus subsidies.

For example, -companies could choose to mine unprofitably to protect their reserves -companies could operate a Bitcoin service, such as an exchange, that charges other fees (e.g. exchange transaction fees) and use those to subsidize mining costs and secure the network that they have a business interest in -individuals could mine for fun or to support a network that they believe in -nation states could spend infrastructure budget to support the network that is critical for their economy -and on and on and on…

I didn’t get any response to that. Please poke holes in my argument or correct my misunderstandings. I would like to be better informed on this topic. Thanks.