Litecoin transaction fees are set to be lowered by ten times in the next Core release.
The team behind the seventh biggest coin by market cap revealed the news via a Medium post earlier today.
Litecoin Transaction Fees Set to Lower
Currently, the average Litecoin transaction fee equates to about $0.05 per KB. But the network’s upcoming release of Litecoin Core 0.17 is going to lower this by a factor of 10. With the new changes, the new fee should equate to $0.005, or half a cent.
At that price, Litecoin transaction fees will mimic 2015 levels.
The core developers made the decision to combat the rising price of Litecoin transactions fees. Transactions could cost over $0.10 and even hit just over $1.00 on occasion.
Core Lead Developer Adrian Gallagher elaborated on the move saying:
“To encourage more adoption and usage of Litecoin, I think lowering the fees are [a] 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 [sic] re-actively.”
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A Bit about Transaction Fees
Transaction fees depend on the space used in a block to register the transaction. The fee is like paying for that space in the block and gives miners an incentive to process your transaction.
Processing fees begin to increase when demand outweighs space. Litecoin still has a lot of space in its blocks, and so there is no need to ‘bid’ for transactions. This is why Litecoin transaction fees can be so small.
In traditional fiat currency transactions, fees are dependant on the amount of money being sent. The larger the transaction amount, the larger the fee.
But crypto transactions are different. The larger the transaction data, the larger the fee. Transaction data means the number of outputs and inputs or addresses on the network where the crypto is moving to and from. Therefore, transaction fees can differ and someone sending a small amount, may actually pay more in transaction fees than someone sending a larger amount.
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