I see. But in the limit case where just everybody decided BTC is nonsense and stopped transacting entirely, while mining could continue, eventually it would die out, right?

Probably, yes. But it’s important to realise that bitcoin started as a payment system. Meaning lots of daily transactions would be done. These days it’s used more for speculation, as a value storage system and for transferring to other coins. Which implies a lot less transactions.

Everybody basically has already decided that BTC is nonsense for payments and stopped using it for that. This is exactly why the transactions have so much “overhead” because so few transactions are compared to so much mining.

So in a sense, do transactions not drive the need for mining? If that’s the case, the connection isn’t directly casual so much as one of complicity. Does that make sense or am I still barking up the wrong tree with this way of thinking?

Not really, no. Miners mine as an investment. The whole payment system community has already been taken over by other systems which are much better suited for that, like Etherium, which has proof of stake for low overhead, fast transaction time and smart contracts. The BTC community reacted with lightning but it was too little too late to solve this usecase.

So now BTC is less like a “bank” and more like a “goldmine”. That’s how you should see it. Even though gold is a useful material, most investors that buy gold don’t buy it with the intention to ever sell it to a factory making connectors or whatever. They just buy it because it’s scarce and the price keeps going up, and people assign value to it.

Bitcoin is in the same position now. It has value because people decide it has value. This is not really related to its potential use as a payment system. Though transactions are still necessary for trading between investors, it’s much much less in volume than it would be if people were still using it to pay for stuff in shops.