At the bull market at the end of 2017, bitcoin transaction fees temporarily exceeded $ 50 per transaction. Litecoin quickly became a much cheaper alternative and became the “little brother” of Bitcoin.
The transaction fees of Litecoin are still almost negligible. However, the developers of the popular Altcoin believe that it would be beneficial to the project if they continued their efforts to bring the fees close to zero. So Litecoin.com on media announced the upcoming Litecoin software update Core 0.17. With this update, the average network fee is to be reduced by a factor of 10.
According to the data on BitInfoCharts, the average charge for a transaction from a Litecoin is 0.5 US cents. With the introduction of the software update, this fee for the normal users is likely to drop to 0.05 US cents or less.
Among the reasons for the cut Litecoin.com quoted Adrian Gallagher, the chief developer of the Litecoin project. Gallagher said that low fees would encourage adoption, as would the use of the crypto asset. He also said that he did not expect the crypto markets to be in the lower price ranges for much longer. He hinted that he would expect a market reversal in the next three to six months.
How are the transaction fees determined and what are they for?
Basically, the amount of transaction fees depends on how much space a transaction takes in a block. The transaction fees essentially serve to prevent spam in the network and create a hierarchy of demand. Those who pay the most have the highest chance that their transactions will be included in the next block. However, at the moment, the Litecoin Blocks are not filled, so there is no reason to pay higher fees.
But what about the Litecoin miners?
However, there are also observers who are skeptical about the announced change. They point out that the announced drastic fee reduction is a pity for the revenues of the cryptocurrency miners. This could compromise the security of Litecoin's proof-of-work based blockchain. So far, the Litecoin network is still one of the safest decentralized networks in the world.
Security concerns may apply to some other proof-of-work blockchains, such as Ethereum or Bitcoin's blockchain. On Litecoin, however, she can not be easily transferred. For Litecoin there is still no so-called fee market. This arises when all Litecoin are geminted. The market is then the main source of income for the miners, who can only earn revenue through fees. Currently, the miners still earn their money mainly by mining, so the creation of new blocks. The current reduction in transaction fees should therefore currently have little impact on miners.
Sources: Medium, BitInfoCharts, Pixabay
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/litecoin-transactionbevels-sollen-drastisch-sinken/
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