Charlie Lee’s ultra-fast coin has been under the radar during the last 24 hours and everyone seems to be talking about the upcoming soft update which brings down transaction fees. Just in case you thought the coin was libertarian and decentralized enough, “the good guy” of the crypto world (as he was called by Coindesk in their year-end top 10 influential people), now the miners will get a lot more freedom over the fees they sell the coins for.
This decision solves an issue that has been causing unhappiness among miners for years, and opens up the fees determination to the good old principles of free market capitalism. Now instead of lobbying to the developers and asking for an adjustment of fees, the owners of the mining rigs have to reach a consensus in regards to a median price and permanently remain competitive.
Competition brings down prices
Thanks to this game-changing decision, Litecoin will become the most libertarian coin on the market and once again spearheads innovation that can someday be implemented on the good old Bitcoin. It’s part of Charlie Lee’s commitment to improve the coin and make it truly competitive in terms of exchanges.
While lots of other coins seem to be too concerned about the price, market capital, and ranking on Coinmarketcap.com, Litecoin is different and seeks a broader embracement for transactions. As Charlie Lee put it in a recent tweet of his “Litecoin IS the payment coin”.
It’s part of the commitment to bring the faster Bitcoin sibling into the mainstream and complete his grand-daddy in the fields where it lags behind. It’s far more difficult for the BTC stakeholders to reach consensus for changes (as seen this fall during the SegWit 2X controversy), and that’s why Litecoin can be the currency of firsts. It’s the coin that proves the virtues of software updates and prepares us and our expectations for Bitcoin’s Lightning Network update.
Miners can choose the fee they work for, traders will see the fee and choose the best price!
Though it’s hard to explain in technical computer science terms, in plain English and economics it’s that simple: Litecoin gets rid of fee centralization and allows the miners themselves to choose the minimum threshold. The information about the fee will be shown in front of the block, and this way the process becomes more transparent and convenient for all parties involved.
While this type of decentralization of decision-making can potentially create price cartels and do very little for its purpose of bringing down fees, the scenario is unlikely if the miners care about the future of Litecoin and want it to succeed. And since the success of the coin translates in greater profits for them, it remains to be seen how and if the price of the crypto will increase.
So far, the announcement has brought a nice pump to LTC and it’s expected that the transaction volume will increase after the soft update takes place. Litecoin IS the transaction coin, and it’s decisions like this that help cryptocurrencies take important steps towards mass acceptance and embracement. Will institutional and financial partnerships follow? Well, for now we can only hope.
Disclosure: I’m a Litecoin believer and HODLer.