Litecoin plans to release the new upgrade, Litecoin Core 0.17, very soon, but there are many benefits that will come with it. The biggest feature that users will now have lower network fees by 10x. Presently, for each KB, the network’s rate is Ł0.001 or ~$0.05. As the new upgrade will be implemented, the rate will be reduced to “Ł0.0001 per KB or ~ $0.005, half a cent and back at 2015 levels.”

Back in 2017, transaction fees were substantially higher at about $0.10 per transaction, though some fees were as high as $1.00. To discuss the recent decision, the blog quoted Core Lead Developer Adrian Gallagher, who said,

“To encourage more adoption and usage of Litecoin, I think lowering the fees are good thing. We’re not even close to block limits and the block size on disk is pretty small (20GB) relative to other coins. Technically people can already adjust their fees right now to the one above because of the more relaxed min relay/dust relay fee. I also don’t think it will be too much longer before this bear market is over (3–6 months) so it will lay down the foundation for a fee rate which we can grow into proactively rather then re-actively.”

The transaction fees on the Litecoin platform are determined by the size of the transaction, and how much of a block it takes up, which ultimately means that larger transactions come with larger fees, though the amount has absolutely nothing to do with the fee. The Medium blog explains, “This is why someone could make a transaction for $1MM and pay $0.01 and another person sending $100 may have to pay $0.10.”

Providing some clarification, the company explains the concept of Point of Transaction fees, saying, “Transaction fees are in place to prevent and disincentivise spam on the network as well as create a hierarchy of demand, those who pay the most are more likely to have their transaction included in a block. Currently because the blocks aren’t full there is no need to pay higher fees, which is one reason why the move is being taken.”

The fee market is of special importance in this blog, which refers to when most of or all of coins have been mined. At that point, the only way that miners will get paid is through the transaction fees. Litecoin doesn’t have much of a fee market at the moment, though the blog adds, “[A]s inflation slows and dependency on transaction fees increase in the decades to come, it will be interesting to see how this develops and whether the price and demand of Litecoin rises to match and offset the deflation in the asset.”

The views and opinions expressed in the article Litecoin Reveals Lowered LTC Transaction Fees in the Next Core Release by 10x do not reflect that of nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.

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