Litecoin (LTC) Transaction Fees To Fall 10x In Anticipation of Bear Market End, Full Blocks

Colin Muller

Litecoin fees will fall by up to ten times, as part of changes in the upcoming version 0.17 of Litecoin, according to a post on the official Litecoin Medium. In the future, the average network fee will be Ł0.0001 per KB, as opposed to the current average of Ł0.001 per KB - $0.005 versus $0.05 at current prices, respectively.

The post detailed a current mismatch in the Litecoin ecosystem which has drawn attention to the issue of transaction fees, namely that fees remain relatively high even as demand for blockspace for transactions is low.

Fees are calculated per KB of memory usage in the blocks, and the post explained:

[c]urrently because the blocks aren’t full there is no need to pay higher fees, which is one reason why the move is being taken

Transaction sizes are based on the amount of transaction data they contain, rather than the amount of value being transferred. Some transaction sizes are less than one KB.

Adrian Gallagher, current lead Litecoin developer and the first hire of the Litecoin Foundation, said  that the future intentions of Litecoin were to “lay down the foundation for a fee rate which we can grow into proactively rather [than] re-actively [sic]”. His remarks come in anticipation of the end of the current cryptoasset bear market, which he predicts will end in three to six months.

The post also touched on the idea of a fee market, which applies to many other cryptocurrencies as well as Litecoin. In the future, when block rewards begin to diminish, it will become necessary to incentivize mining in a different way, namely with transaction fees to transfer already-existing cryptocurrency, rather than creating or “minting” new currency.

Déjà Vu

The strange thing is, this issue is not new, nor in fact is this announcement.

The exact same “news” was announced by Litecoin creator Charlie Lee way back on January 17 - when litecoin’s daily price closed at $187. Lee, also back in January, discussed the incorporation of a fee market into the Litecoin code.

On January 6, Lee outlined intentions of hard-coding in a fee market, proposing that fee rates be stored in Litecoin block headers. If this were the case,, "[m]iners [would be able to] choose to not mine low fee transactions to signal to the market to increase the fees. This should help create a fee market" Adding "I'm convinced this will work". This sounds a lot like Gallagher’s proactive-not-reactive aims.

Whatever the case, it would seem that this Litecoin upgrade has been in the works for some time.

Charlie Lee famously sold all of his Litecoin and later regretted it - although he added that “[he] didn’t actually have that many Litecoins” to begin with.

Litecoin Foundation to Issue Physical Cryptocurrency Debit Card

Neil Dennis

The Litecoin Foundation, a non-profit organization helping promote LTC, announced late on Tuesday (June 18, 2019) that it was to launch a debit card that will enable users to spend their cryptocurrency online or in physical store locations. 

In partnership with Bibox Exchange and Ternio, the blockchain technology enterprize group, the Litecoin Foundation said the special edition card will leverage the existing "Blockcard" platform built by Ternio.

Helping propel crypto adoption

The Litecoin Foundation said on its blogsite:

[We] want to give crypto holders the ability to spend cryptocurrency with the same ease as traditional credit cards. Through this collaboration, these three companies will help propel the adoption of crypto spending in everyday life.

Bibox, the exchange, will act as a custodian of the card holders' funds and will help route the deposits and spending for users by leveraging more than $200 million worth of cryptocurrency trading volume. 

Meanwhile, Ternio's blockchain technology platform will be able to carry out transactions in Litecoin, and the native tokens of both Bibox (BIX) and Ternio (TERN). Thanks to a partnership with Visa, the debit card can be used at any card terminals that accept Visa.

Growth Industry

The Litecoin Foundation joins a growing roster of crypto and blockchain companies to release physical cryptocurrency cards. These include the Shift card issued by the Coinbase exchange and the CryptoPay Bitcoin debit card.

Charlie Lee, creator of Litecoin and managing director at the Foundation, said: 

This is an exciting partnership for us as it furthers the Litecoin Foundation’s mission to create more use cases for spending Litecoin in everyday life. Leveraging Ternio’s BlockCard platform with Bibox’s exchange engine gives Litecoin holders unparalleled access to use their LTC at merchants around the world.

It is hoped the Blockcard project will be a greater success than the Foundation's previous foray into card payments. Having gone live in February 2018, LitePay was abandoned the following month due to the "negative perception and drastic actions card issuers have towards cryptocurrency companies".

Litecoin Foundation said that the Blockcard would be issued to US customer first, going worldwide soon thereafter. There were no details on when the card would go live: both Litecoin and Bibox said they would notify their US users on how to register.