The Litecoin project is set to update the Litecoin Protocol to version 0.17, the team announced via Twitter. The update will see the network’s fees dramatically reduced, down to half a cent.
— Litecoin.Com (@LitecoinDotCom) October 19, 2018
The improvement is the team’s response to the increasing transaction costs since the Litecoin token (LTC) has risen in value. Currently, the average transaction fee hovers around $0.05.
The change would bring the price down to $0.005, a significant reduction that puts fees at the same levels as 2015. Contrast that to Bitcoin’s current transaction fee, which hovers around $0.10, and Litecoin becomes a much more viable alternative.
One of Litecoin’s fundamental principles is to offer a lower transaction cost than Bitcoin. Litecoin creator Charlie Lee has analogized Bitcoin and Litecoin to gold and silver, 2 forms of digital currency that complement, rather than compete, with each other and noting how the user bases overlap.
Validation of user’s request to include a transaction in a block determines the fee rate — the more data, the higher the rate. As more users join the network and tokens are increasingly transferred between wallets, the fee rate increases.
Litecoin Core Lead Developer Adrian Gallagher views this improvement as preparation for the time when the market expands, saying:
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. 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 re-actively.
Every cryptocurrency project makes the reduction of transaction rates a top priority — an aspect of scaling that is of equal importance as transaction confirmation times. It is an unavoidable feature of the network because it is the primary mechanism by which malicious behavior is disincentivized.
Litecoin has experienced a relatively stable 2018 and undergone several positive developments during the year. Just last week, the Winklevoss twins-backed Gemini exchange added Litecoin after approval from authorities.
Planned features that are on the project’s roadmap include confidential transactions and Lightning Network integration. Both features should drive adoption of the cryptocurrency, which would prime Litecoin for what many say is going to be the bull market of 2019.