The Litecoin development team has revealed via its official medium post that the Litecoin core 0.17 update will slash transaction fees by a factor of 10. As such, the average transaction fees which are presently an average of $0.05 will reduce to $0.005. This is a significant reduction that returns the network’s transaction fees to the fees collected back in 2015.
Compared to bitcoin’s $0.10 average transaction commission, Litecoin is obviously a more cost-effective way to transact. This move supports Litecoin’s fundamental principle which is to facilitate cheap transactions. Litecoin’s founder, Charlie Lee has constantly stated that the network is more concerned about its development and adoption rather than price movements. Therefore, it is safe to say that the transaction fees slash is a strategic move to increase Litecoin’s adoption.
Litecoin’s Lead Developer Says Bearish Run About To End
Transaction fees basically increase with the increase of users of a blockchain network. As such, users pay exorbitant transaction fees during congestion periods. Litecoin core Lead Developer Adrian Gallagher shed more light on the importance of slashing the transaction fee when he stated in the official announcement:
“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.”
Also, Gallagher believes that the bearish run of the crypto market will come to an end soon. In particular, he is certain that the market will recover in the next three to six months.
In addition, the post discussed the importance of transaction fees to the smooth running of blockchain networks. They help prevent spam transactions as well as help create a hierarchy of demand. Therefore, the more the space requirement of a transaction, the higher is the transaction fee.
Will The Reduction In Litecoin’s Transaction Fees Affect Its Mining Activities?
The Litecoin network utilizes the proof-of-work mechanism, as such, apart from the block rewards, miners pocket the transaction commission of validated transactions on the block they discover. However, with the current transaction fees, miners only make an average of $2 on each work. Therefore, it is safe to say that the upcoming transaction fees update will not significantly jeopardize miners’ income.
Litecoin’s move to reduce its transaction fees shows that they are preparing for an explosion in adoption which is already coming to fruition as many platforms are starting to adopt the cryptocurrency.