Quote from: sidazhang on November 24, 2013, 05:51:46 PM

Is the minimum bitcoin fee arbitrarily set in the system? Is there even scope to lower it substantially in the future?

Fees are for the health of the bitcoin network, and serve to ensure that transactions cost enough that transactions are not used for flooding the network with activity by attackers, and are actually used for non-trivial money transfers. Enforced minimum fees have been reduced before when the real-world value increased beyond simply "transaction disk space should cost something".

It is set arbitrarily by consensus in the software that all Bitcoin users use - every node has a no-relay policy for non-minimum fee transaction, effectively blocking communication of transactions without it. The 0.0001 BTC minimum for relay has been in place for 2.5 years, even when mining required more. Fees are required only for certain transactions, such as if any amount spent is less than 0.01 or if the coins being sent are recent to the wallet.

Pools can include whatever transactions in blocks they want, but minimum fee blocking rules have only been knowingly altered by one pool. With the network as busy at it is now, it is best to set the optional fee above the minimum anyway if you want your money reliably sent quickly.

You cannot simultaneously complain about:

* Why do we pay fees?, it should be free for me,
* Why doesn't my transaction confirm? and,
* Why does the blockchain of all transactions take so long to download.