Daily Litecoin News Update
The same week as Bitcoin’s new upgrade is rolled out, Litecoin developers release the Litecoin update in a bid to stay ahead of the curve. The just-released “Litecoin Core version 0.15.1” embraces lower relay fees.
Just to be clear, relay fees are different than transaction fees. Transaction fees will be lowered in the next major update, the “Litecoin Core version 0.16.0,” which is currently in the works.
So what’s the difference? What does the current upgrade offer?
In layman’s terms, a relay fee is the minimum fee you’re willing to pay for a transaction, while the transaction fee is the amount you actually pay. Confused? Let’s break it down further.
When you conduct an LTC transaction, it enters the memory pool where miners pick it up, validate it, and add it to a block on the blockchain. In turn, they charge you a fee. This is the transaction fee you’re required to pay.
Now, if the memory pool is already crowded with transactions pending to be approved and your transaction makes its way to the memory pool, chances are it’ll find it hard getting in.
So you pay a minimum fee to relay your transaction across the network, hoping for a miner to grab it and validate it. This minimum incentive you’re willing to pay to get your transaction processed is the relay fee.
Prior to the latest update, Litecoin’s minimum relay and transaction fees were both set at 0.001 LTC per transaction. Version 0.15.1 slashes relay fees to 0.00001 LTC per transaction. The next update, Litecoin Core version 0.16.0, will cut transaction fees to 0.0001 LTC.
Given that Litecoin is already super cheap to use for digital transactions, the upgrades give it a leg up against Bitcoin, just in time. The market, however, has seemingly failed to appreciate it.
Chart courtesy of TradingView.com
In case you haven’t been following, Bitcoin’s latest update “Bitcoin Core version 0.16.0,” which was released earlier this week, has fully adopted “SegWit.” Bitcoin developers had long mulled over the SegWit soft fork but did not initiate it due to failure in finding mutual consensus.
But Bitcoin users and investors had been getting impatient with Bitcoin’s rising transaction costs and wait times. It seems like the developers finally caved to their demands.
SegWit integration increases Bitcoin’s scalability, making it a lot cheaper and faster to use than it previously was.
So it made perfect sense for Litecoin, which directly competes with Bitcoin, to slash its network fees in order to stay competitive.
Litecoin currently presents a better use-case as a “payments coin” for the mainstream. As the market begins to appreciate it, prices will likely find their way back up.
By: Palwasha Saaim B.Sc @ profitconfidential.com