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.

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Litecoin Is Now the Miami Dolphins' 'Official Cryptocurrency'

The Miami Dolphins, a popular American football team, have recently partnered with the Litecoin Foundation to start accepting cryptocurrency payments.

According to press release published on Thursday, the partnership between the Litecoin Foundation and the Miami Dolphins will become active in the 2019 NFL season and will see the Dolphins start accepting litecoin payments as their “official cryptocurrency.”

This means American football fans will be able to buy tickets to see games at the team’s Hard Rock Stadium using both litecoin and bitcoin through the team’s 50/50 raffle, which gives half of the proceeds to a charitable organization, the Miami Dolphins Foundation.

The cryptocurrency payments are set to be handled by a third partner in the partnership, a payments processing firm called Aliant Payments. The press release touts the partnership will give Litecoin “the ability to tap into one of the NFL’s largest and most passionate fan bases through in-game branding and advertising opportunities at Hard rock Stadium.”

Charlie Lee, the creator of Litecoin and the managing director of the Litecoin Foundation, was quoted as saying:

This collaboration propels Litecoin in front of an audience of millions of people around the world at a time where adoption of cryptocurrencies continues to gain momentum and the ecosystem is able to support real world use cases in ways previously not possible.

Lee added the Litecoin Foundation sees this is as a “powerful way to raise awareness and educate people” about litecoin and the cryptocurrency space on a “tremendous scale.” Kim Rometo, the vice president and chief information officer of the Miami Dolphins, noted the partnership will provide its guests the ability to enjoy the 50/50 raffle while donating for charity.

The Liteocin Foundation, a non-profit organization looking to help grow LTC adoption, has notably been making progress over the last few months. Back in December, it partnered with the Ultimate Fighting Championship (UFC), a leading mixed martial arts organization, to display the Litecoin logo in a title match.

Recently, litecoin was added to cryptocurrency payments startup Flexa’s SPEDN mobile wallet app, allowing users to pay using the cryptocurrency at over 39,000 merchants.