Quoted from Frax:So why would low value transactions ever get validated if this is the case.
Well, eventually they run out of all the high-paying transactions, or they want to finish a block and have a specific amount of bit space left in it, so they'll start doing the lower value transactions.
When bitcoin started really soaring, a lot of people who played with it back in the day, like myself, decided to pull out their old wallet software - but there's been a few changes since then, and the old wallet software wouldn't allow you to set a variable fee; they had a hardcoded fee based on bitcoin only being worth, like, $10-$100. So if they tried to move their bitcoin out of that old wallet, it would sit in the queue sometimes for weeks!
In my case I did some hand-wavy magic to upgrade the software and move my wallet over, so I could then transfer out the remnants of bitcoins I had left over from the various transactions I did back then. What was pennies in 2010 was suddenly real money.
Quoted from Frax:I know the few times I've tried to get ETH/LTC mining working, it looks like it's doing a lot of nothing, I'll leave it on overnight, and have reports of shares I've earned in the pool or whatever, but I don't have any say at all at what gets processed. I guess you have more freedom to restrict what you're doing when you're not pooling?
Well, the real power players in mining are using dedicated ASIC miners with customized software.
This explains it in English.
https://www.coindesk.com/information/how-bitcoin-mining-works/
Basically the miners are validating the transactions, but in order to prevent all the coins getting mined right away, the system makes it purposefully difficult to generate the next hash. That's the "proof of work" part.
Quoted from Frax:And again..are these fees on top of what the exchanges charge, and the amount of BTC to cover it just disappears into the miner's/pool's account?
Yes. Exchanges can charge a fee, like your bank does for cheques or something. The mining fee goes to the miner who validated your transaction. You could technically make it zero, but it's unlikely any miner would select your transaction.
https://en.bitcoin.it/wiki/Transaction_fees
Here's a fun list of the top BTC wallets.
https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
If you click on some of them you'll see BTC going into them - that's mining fees. This one for example - someone mined around 80,000 BTC back in 2011 when it was under a dollar, then nothing after, and mining fee coins have trickled in ever since. The person who made that wallet probably lost the private key or forgot all about it, so now their billion dollars is locked away.
https://bitinfocharts.com/bitcoin/address/1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb6uF