Do the mining programs automatically select the transactions with the highest fees? Been looking at BFGMiner but didn't notice a configuration for this or any mention of it in the README.
If you are mining in a
mining pool, then the pool is selecting the transactions and building the blocks. Then they just hand off the block header (or, more specifically, the partially hashed header called the midstate) to your software for you to complete the hashing on. In that case, the pool is probably running custom software to build the block headers.
If you are
solo mining, then your mining software is probably getting its block headers from Bitcoin Core using a getwork API call. In that case, Bitcoin Core has the transaction selecting algorithm coded into it. I haven't done any mining, so I don't know how configurable that algorithm is. You do have a few command line options when starting up Bitcoin Core:
- -blockmaxweight= Set maximum BIP141 block weight (default: 3000000)
- -blockmaxsize= Set maximum block size in bytes (default: 750000)
- -blockprioritysize= Set maximum size of high-priority/low-fee transactions in bytes (default: 0)
- -blockmintxfee= Set lowest fee rate (in BTC/kB) for transactions to be included in block creation. (default: 0.00001)
Correct. Assuming there aren't any significant changes to the protocol to allow more on-chain transactions, eventually Bitcoin will either die or it will develop high enough transaction fees that nobody will be using it for small value on-chain transactions.
One of the articles mentions Lightning Network with instant transactions and low fees, which to me looks very interesting.
Lightning Network is one of a few off-chain solutions to allow a large number of off-chain Bitcoin based transactions. Another off-chain solution is Bitcoin based accounts with services such as Coinbase or BitPay. Each has their own benefits and issues, and each will probably find use in various circumstances.