Litecoin’s Proposd “Fee Market” Soft Fork Plan Explained

Litecoin’s Soft Fork – Charlie Lee’s Plan for a ‘Fee Market’

After Charlie Lee, Litecoin’s founder, recently announced that he had sold/donated all of his own LTC to avoid any conflicts of interest, many worried that this marked an attempt by the developer to distance himself from the project.

It seems, however, that he has no intention of slowing down, after a tweet on Saturday laid out his proposal for a soft fork to the network.

In a series of follow up tweets, Lee explained how the creation of a ‘fee market’ could further drive down the price of fees on the Litecoinnetwork. The idea is to create competition by allowing miners to set the lowest fee they are willing to accept in the block header.

At times where the mempool is clogged, miners could set higher fees due to demand. Conversely, when the mempool has a lower volume, they would compete to confirm lower-fee transactions.

Some have voiced concerns that such a system could lead to mining cartels (i.e. collusion to impose high fees), but considering the overheads of owning mining hardware, combined with the decentralization aspect of cryptocurrency (there will always be someone willing to undercut their competitors), miners are incentivised to act fairly.

Read More at Crpto Slate’

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Paul Gordon is the publisher and editor of iState.TV. He has published and edited newspapers, poetry magazines and online weekly magazines. He is the director of Social Cognito, an SEO/Web Marketing Company. You can reach Paul at pg@istate.tv