Through Twitter, the team has announced that the Litecoin Protocol is set to be updated by the Litecoin Project to version 0.17. This update will lead to a dramatic reduction in network fees to just half a cent.
This improvement is coming as a result of the high costs of transaction since the increase in value of the Litecoin token (LTC). Presently, the average transaction fee is around $0.05
Litecoin (LTC) Price Today – LTC / USD
With this change, the price will be reduced to $0.005, a reduction that will take the fees to the same level it was three years ago. With this new development, Litecoin will become a more preferred alternative to Bitcoin, whose transaction fee currently stands around $0.10.
One fundamental principle of Litecoin has been to offer than Bitcoin, a lower transaction cost. Charlie Lee (founder of Litecoin) has likened Bitcoin and Litecoin to gold and silver, rather than compete, these digital currencies complement each other, and also check the overlap of user bases.
The fee rate is determined by the validation of user’s request to include a transaction in a block: The more data used, the higher the rate and vice versa. The fee rate increases as tokens are increasingly transferred between wallets and as users joining the network increase.
Adrian Gallagher (Litecoin Core Lead Developer) sees this recent development as a way of preparing for a time when the market expands, saying that: “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.”
All crypto projects has prioritised the reduction of transaction fees, an aspect having the same importance as transaction confirmation times. It is one feature of the network that cannot be avoided, because it is the main mechanism through which malicious acts are disincentivised.
In 2018, Litecoin has been relatively stable and has seen several positive developments. Last week, Gemini exchange which is backed by the Winklevoss twins, after approval from authorities, added Litecoin.