mining pool operators decide the transaction fees, which is a handful of people (the 'elite').
14% are not pools and most accept free transactions, 17% is ASICMINER which accepts free transactions as well. The rest "high" fees are a free market regulating itself and that is clear as the hashing power get redistributed between pools by simple guys like me and the typical Joesixgigashashminer.
if an "elite" like slush choose 1 BTC as fees he will not hinder the network more than his variance of finding a block which will delay your transaction mostly by nothing and in 6-7% of the transactions, by a couple of minutes, if ever.
so yes, it's quite centralized. it has already happened before with the 0.0005 minimum fee and will happen again as miners lobby the developers to code in higher minimum fees for better profits for the miners
The reason was not
for better profits for the miners and a quick calculation of mining fees against block reward will show how absurd that is when you compare to the reason we all know, Which is to stop spamming the network and inflating the block chain. As well as planting the seed for the fees free market mechanism.
what's also notable is that mining pool operators are not voted for by the people for the people so it's not even close to democratic
The voting is done with hashing power so when I move my mining operation from slush pool to deep bit that is considered voting for a different pool operator and that is exactly what happened when deepbit reached 51%+ of the network.
Further more on this subject I would also add that slush and others are working on extending the adding features to stratum to allow the pools miners to choose specific transactions to include.
huge flaw in bitcoin that can only be fixed with a new bitcoin protocol. I guess satoshi forgot about this
Then dig in by all means and help out. Go to extends of forking and creating an alt coin but please don't let all what I wrote to you go in vain. I am not trying to discourage you or plainly say you are wrong. I am trying to help you as much as I can to inform you of any information that I know regarding the subject. Now it is just your part of checking the validity or my responses and the rationale regarding the works-in-progress/done of the points you questioned of Bitcoin.
nothing prevents mining pool operators from making a joint operation and decide to increase fees. there is just a current 'trust' by the bitcioners that mining pool operators won't form a group 'elite'.
Once they do form a group (they will, because absolute power corrupts absolutely), they can drip by drip increase the fees as they see fit. ofcourse they won't do it in any big amounts (maybe 2% increase a year), just enough so it doesn't cause a riot amongst the peasants of bitcoin. they could also decrease fees and this way control the money supply by deflation and inflation to their private agenda.
the people's of bitcoin cannot do anything about it. don't come up with stupid shit like 'oh just built an alt coin' or 'dont use bitcoin if you dont like it'. that's really a weak argument. bitcoin is established and people use it for their personal reasons. ofcourse eventually the people's of bitcoin will eventually revolt against this centralized power but that will not happen until many years of being raped by the bitcoin elite.
the problem is that bitcoin has a premise that such a centralization does not exist, but there is and it's very obviously there for everyone to see. and it's extremely dangerous. the centralized power is at the mining operators and they are just a very select few people that were NOT even voted for power. it will be a funny day when people's of bitcoin can vote for who will be the mining operators because that assumes central power like it is in the current world already.
if you can't understand this then that's ok, I don't expect someone to be rational when they are emotionally attached to something.
