So I set my fee as less than the default for Electrum wallet. I believe .1mbtc per 1kb and the blockchain would not confirm it for a long time. Isn't that enough of fee? It seems the default fee is pretty expensive. How are exchanges able to send with fees as low as .00002 and get confirmations?
.3mbtc per kb should be enough to get your transaction confirmed fast.
default fee is 0.0005 (0.5mbtc) per kb, right? that's not at all expensive IMO.
for the exchanges .00002 fee you speak of, I won't know unless you post the txid. but even then they might have their own miners that will always include their transactions.