Bitcoin transaction fee system

[Mikko8]

I though I understood the fee system but I was so wrong. Take a look at this transaction http://blockchain.info/tx/f7e67a8236e1cfd38e5679f1cbd08e4d0f337a20947b4c001bdbadfe2fb1abb3. The fee paid was just BTC0.0002 which is less than the BTC0.0005 fee described on the https://en.bitcoin.it/wiki/Transaction_fees#Sending page. As I understood it, since one of the output was less than BTC0.01, the fee should have been BTC0.0005. So why wasn't this the case?

And a follow up question: if the fee is still obligatory and can be set lower like in this case, could the fee have been just 1 satoshi?

[Minotaur]

That's the behavior of the default/reference implementation, not all implementations follow this.  In theory higher fee transactions should be prioritized but I'm not sure which software, if any, has implemented such a system.  (Is it a net slowdown?)

Note to anyone reading this, I'm looking for my first bitcoin mining rig.  My room is too cold so a good Radeon 6770 for 40 or so and the opportunity to pay it back in BTC would be nice.

And if anyone knows of a simple to script/encapsulated BTC client let me know.   I may try implementing that myself.  Also, functionally, fee's are optional, there may not even be a fee on some blocks.

[Mikko8]

Which client allows to override the suggested fee amount? I'd like to consolidate tens of µBTC transactions into a single coin and pay a much lower fee. I'm using 'Armory' as my wallet manager but I guess I could export private keys to another well-known client.

[nango]

Electrum lets you set whatever you want, IIRR... if it doesn't I could easily make a patch to fix that or perhaps enable it as an expert option.

For consolidation, you could setup a tiny fee for the transaction and just expect to wait a long time... but in personal finance management, time probably doesn't matter so much.

[Mikko8]

I am just worried that my specified fee would be overridden by the clients default.

[DannyHamilton]

Once you build a transaction and sign it, nobody can change it.  They can refuse to relay it so it never gets to a miner, but they can't modify it.

So the worst that would happen if you broadcast a transaction with insufficient fee is that no peers will relay your transaction and it will never get confirmed.