The idea behind the introduction of a virtual currency was never, and has never been, to burden people with heavy costs of transaction.
The brains behind the introduction of virtual currencies, bitcoins being in the forefront, intended that this new dimension of trading be not only fast and convenient, but also cost effective by all means.
At the very least, bitcoin minimum transaction fee should be very negligible, and where possible be scrapped off the system completely.
Where do bitcoin transaction fees go?
The answer to this question should be understood in two dimensions. First and foremost, the bitcoin network has computers within the network that receives your coins, each time you set out to carry out a transaction. Whenever you choose to send bitcoins, that computer receives a small amount of the coins, usually 0.0001BTC for every 1000bytes.
This should remind you of every time you go to a post office to send a mail – for every mail you send there is always a postage stamp. Should you decide to send one file in several smaller documents separately, then you will end up paying more postage fees. Similarly, any effort to make small transactions may result in spending more transaction fees.
This is mostly because smaller transactions would end up occupying more space in the block. To regulate such factors, always visit the ‘transactions’ icon, and you will be able to view the size of each of the transaction. It would therefore translate to mean, that for reduced bitcoin transaction fees, endeavor to minimize minute transactions with very little bitcoins.
On the other hand, bitcoin mining attracts transaction fees, which usually find its way to the miners. It is important to note, that for each transaction that is carried out, these coins belong to a given block, and each block is associated with a given miner.
As a result of this relationship, all the fees related to a given transaction and a given block goes to the miner in charge. In light of this, miners strive to ensure they handle clients whose transactions would somehow attract some fees.
Whenever some coins remain in a transaction, usually they are sent back to the sender as new coins (now received), and can obviously be used again.
Note: as small as the bitcoin transaction fees may be, they are still believed to be high because the value of the currency has been on the upper side. With time, it is hoped that the fees will reduce significantly, as the value of bitcoins stabilizes.