I understand why the transaction fee exists, what I was asking is what is the complex manner in which values get combined and split.

I've been reading/listening to more stuff since I made this topic, so I understand a little better now about some of my questions, like block chain forks. And I think I might understand my question about bitcoins getting fragmented: when someone spends bitcoins, it keeps track of how they got them (ex the person I send 1 btc to sees .05+.95) but when it gets spent again later it gets joined (if that person then spends it, the person receiving sees 1 btc). Is that correct?

First off, I'd like to say I think this is so fascinating. I've been interested in the idea of currency ever since I was a kid. I've always loved to imagine how currency got started, or to think about the vast network of exchange currency allows. I like to imagine treating each dollar as worth nothing but the work or good you provided to earn it, and tracing the exchange of real goods and services around.

It blows my mind. Treating dollars as dollars vastly simplifies things, but imagining the real goods and services being provided is an insanely complicated and beautiful thing to me. The fact that I have the entire history of transactions of bitcoins stored on my computer is pretty cool to me.

And now onto my two questions. I was reading https://en.bitcoin.it/wiki/Transaction_Fee and I noticed from text under the inset picture that it says the account's btcs are made up of only .01 btc cents, which makes transactions require more data to be encoded into the block. Why? Are individual whole bitcoins "fragmented" and transferred around? I got the .05 btc from the faucet, if someone else gave me .95 and then I later transferred 1 btc, would the recipient "really" receive .05+.95 btcs?

If that is the case, wouldn't bitcoins get more and more fragmented over time causing the average data to record transactions to go up?

And my other question is about block chain forks. From what I understand, it has a relatively low chance of happening, but when it happens are the two blocks essentially identical, or do they each contain slightly different transaction data? If that is the case, can bitcoins (other than the 50+fee generated) be lost? How often do forks occur, and how long do fork chains get?

Anyways, like I said, I absolutely love this whole concept and I hope it takes off. Its very interesting to me. I've already told my friends and family about this.

Oh, I have another question. If changes to the way the client works is necessary, how will you get everyone to upgrade to the new way without having to pause the economy? From what I've heard, bitcoin only works among people who use the exact same client. It makes sense that you could simply import the old blockchain into a new version, and then as people joined the new version it would continue on, but that requires that the economy is essentially put on hold.