But while transaction processing costs money to perform, it does not seem to be incentivized properly. While there are concrete rewards for generating currency, there is no corresponding concrete and immediate reward for processing the transaction, and voting in transaction approvals. This might be a real obstacle in general acceptance, and some of the root cause behind all of the "so where can I use this" kind of questions we hear all the time.
You seem to equate mining = generating bitcoins when that isn't true. Mining = hashing transactions into irreversable* blocks is part of transaction processing.
I do agree that the other parts seem to be neglected.
The entire processing chain involves
1) Validating & relaying transactions
2) Hashing transactions into blocks
3) Validating & relaying blocks.
Currently only step #2 is compensated but it IS part of transaction processing.
Yes, I agree I did seem to be
making it appear as that was my understanding. I think I have a bit more refined notion of mining, but probably not by much.
My point was to differentiate mining and transaction processing kinds of activities, even though these are intertwined. So I attempt to draw a bright line, where there really is none.
The reason for trying to even make this distinction is that my impression is that there are (or were) a lot of people interested in getting into mining, while transaction processing has a lot fewer players. Mining is much simpler, requiring less sophistication and design than improving transaction processing. So we see a lot more effort in mining, and less in convenience and acceptance. If there were even a tenth as much progress in building transaction infrastructure as there has been in mining, bitcoins would be more commonly used than they are now.