OK, I used coinbase for the first time to test it out. I transferred some BTC into my cell phone and coinbase said that it took out 0.0002 BTC as a miner's fee, BUT when I look in my cell phone wallet, all the BTC that I transferred is there. Nothing was taken out. If I transferred 1 BTC, then shouldn't the amount received be 0.9998 BTC due to the miner's fee? What am I not understanding here?
Usually fees are deducted from a sender's remaining balance, not from the transferred amount.
If you start with 10btc in wallet X and send 1btc to wallet Y with a .0001 fee, wallet X typically winds up with 8.9999. Wallet Y, your payee, should receive a full bitcoin.
Otherwise, users would needlessly have to make an extra trivial calculation for every transaction.
I thought this thread would be about the recent revelation that bitcoin inputs can be completely destroyed by miners who choose not to accept fees. Apparently those inputs can never again be used, even with access to the private keys. (Seems plausible but I have not verified the claim.) This is different from sending to a made-up address for which no known private key exists: in that case, the balance remains permanently accounted for on the blockchain.