Ok this may be a dumb question, but I know the recommended miner fee to pay is about .0001 BTC or .0005.
Sometimes when I send, I will do .001 in the hopes that the transaction will get confirmed faster. I figure the miners will get to it more quickly because it is more income for them.
Does this have any validity? Thanks.
It really depends on how many transactions are pending, and what sort of fee the rest of the pending transactions are paying.
If there aren't many pending transactions waiting to be confirmed, then your transaction will most likely be included in the next block regardless of whether you pay a fee of 0.0001 BTC or 100 BTC. You can't alter how fast that next block will be created, only whether or not a miner will choose to include your transaction in that block, or if you will have to wait for a later block.
If there are a LOT of transactions pending, AND most of those transactions are all paying a fee of 0.0005 BTC, then a 0.001 BTC fee provides an incentive to the miners to include your transaction in the block they are working on INSTEAD OF one of the transactions that are paying 0.0005 BTC. This means that your transaction gets into the next block (as soon as it is created/solved), and the transaction that payed 0.0005 BTC has to wait a bit longer hoping to be included in the block after the one with your transaction.
That's about where things stand today.
Eventually in the future:It is possible that bitcoin will be so popular, that most people start paying a 0.001 BTC fee just to get into the next available block. If bitcoin ever reaches such a popularity, you may find that a fee of 0.0015 will allow you to get into the block currently being worked on and bump out one of the transactions paying a fee of 0.001 BTC so that they have to wait longer.
The more popular bitcoin becomes, the more transactions that will be competing for the same block space, essentially creating a silent auction where each transaction bids for space in the next available block. This can lead to higher fees and longer wait times for those paying a lower fee. If the fees get high enough (and the wait times get long enough), people will choose other payment methods, and the number of pending transactions will begin to drop. As there are less pending transactions, they won't require as high of a fee to be included, and lower fee transactions will be more likely to make it into the next block. The fees necessary and the number of blocks a particular fee must wait for is likely to bounce around a bit as the number of people willing to pay the necessary fee grows and shrinks in reaction. After enough time, the fee structure and number of transactions ought to eventually reach an equilibrium.
