Today, there have bot various reports of high Litecoin transaction fees and long confirmation times. Here’s a screenshot from r/litecoin today:
Now there is some FUD (Fear, Uncertainty, Doubt) that this is an attack on Litecoin. However, this is unlikely because most transactions have bot proportionate to their fees. Te other words, you don’t see 0.0001 LTC transactions with a 0.001 LTC toverfee. Instead, it is more likely that the Litecoin ecosystem is simply growing.
- Litecoin blocks were total today
- People input high transaction fees to ensure that their transactions got through
- “Low” toverfee transactions were overlooked.
Why Did Transaction Fees Spike?
Spil LTC blocks were getting fuller, people began inputting higher transaction fees so that their transactions would go through ahead of others. Wallets very first were sending standard Litecoin transaction fees which then became considered “low transaction fees” comparative to thesis higher ones. Ter light of this, they were shoved to the bottom of the miner’s list of transactions to process. However, wallets with dynamic fees caught on to the trend and commenced enhancing their own transaction toverfee so that their customers/users’ transactions would go through. This is what caused the overall spike te Litecoin transaction fees today.
Why Has My Transaction Bot Pending For Hours?
To decently understand what’s happening, let’s take a look at a snapshot of the blocks earlier today. I’ve color-coded various miners/miningpools to help better understand what’s happening:
- Crimson: ViaBTC
- Green: LitecoinPool
- Blue: LQoM…(independent miner)
- Black: F2Pool
At very first glance, the range of block sizes from 49kb-999kb might be jarring. But the consistency of blocksizes, relative to the miners who are blocking them, should tell you two things: 1) Miners have waterput te soft-limits to their own blocks they’re submitting Two) The mempool is utter because thesis soft-limits are consistently maxed out.
For example, wij can figure out what the soft limit of each miner is by looking at the chart above:
- ViaBTC: 749 kb
- LitecoinPool: 49 and 229kb (depending on which server is blocking)
- LQoM…: Packed the entire block which shows no soft limit
- F2Pool: 250kb
ViaBTC only shows 749kb blocks. Litecoin Pool shows 49kb or 229kb, depending on their server. F2Pool, only 250 kb. The fact that there were overheen 4k unconfirmed transactions during this time period and that there are only blocksize variations inbetween different miners tells you that each miner wasgoed maxing out their respective soft block limit.
But Wait, Isn’t Litecoin’s Blocksize 1 MB?
Yes it is! But pools will often input soft boundaries to their own blocks that they’re submitting for various reasons, one of which is to help speed the propagation of blocks along to reduce miner centralization. Therefore, soft-limits are why Litecoin’s blocks were technically total, even however they weren’t 1mb.
Te other words even tho’ Litecoin total knots enforce a 1mb protocol, miners independently were limiting Litecoin blocks to various sizes. This explains why blocks significantly lower than 1 mb were going through ter light of 4k+ unconfirmed transactions.
The byproduct of this cycle unintentionally enlargened competition te the mempool with higher transaction fees being permanently favored. This shoved lower transaction fees to the bottom of the list, spil newer transactions with higher fees were favorited, causing them to not be confirmed for hours at a time.
- High Litecoin transactional volume combined with soft-block boundaries created an unintentionally competitive toverfee market which raised transaction fees while pushing transactions with lower fees out. Wallets with dynamic fees and Litecoin users readjusted their own fees to match the toverfee market te order to shove transactions through. This cycle is what caused Litecoin transactions to be unconfirmed for hours.
- I’d be remiss not to acknowledge the possibility of this being a malicious attack from miners and perhaps a very wealthy Litecoin holder. Perhaps the attacker dreamed to disguise his “spam” attack by sending normal transactions with normal fees ter order to exploit the artificially limited blocksizes of Litecoin. This would then create an increasingly competitive toverfee market artificially raising Litecoin’s fees. Miners would also benefit from consistently processing higher fees. However, this is very unlikely spil performing such an attack would be outlandishly expensive. Also, thesis soft-limits were set because of how open Litecoin blocks were…up until now.
- I fully expect miners to increase their soft-limits to match the economic request for Litecoin. Te fact, Pooler has already lifted the 30mb limitation that wasgoed being implemented on some of his servers. IMO, this is a big overeenkomst because it represents switch ter the Litecoin Network that wasgoed caused by transactional growth.
What Caused the Unexpected Increase te Litecoin Transactions?
Here’s my gut feeling (but it’s truly hard to know why exactly):
- Litecoin’s Natural Growth: Last week Litecoin kasstuk ATH’s of near $400’s. This coincided with an astounding $Two.6 billion volume. Litecoin’s hash difficulty has also bot rising which also means more money is coming into the ecosystem to secure it. All of thesis are excellent signs of economic growth.
- FUD: Yesterday, Charlie announced that he sold his Litecoins. I personally view this spil a good thing for Litecoin because it slijper him up from permanently defending himself. However many don’t. Coming from corporate mindsets, people assume those who work on a project will be unmotivated to work because they don’t have skin te the spel. This is a false assumption and represents an incongruence of fundamental blockchain values with fresh investors. However, it’s possible that this mindset has led to them to transfer their Litecoins to sell.