Using Litecoin to Save On Fees

By BitcoinGordon | BitcoinGordon | 2 Mar 2022


This is a very narrow topic in scope. Your personal methods of buying, selling, trading, investing, HODLing may prove different strategies.

It is my personal multi-year experience in crypto, that unless you have proportionately massive gobs of money, fees like withdrawal fees and on-chain transaction fees can be a determining factor in whether you lean towards using a particular coin or exchange.

For me, the actual process of trading is about 3 things:

Fees, Volume, and Liquidity. Everything else, including KYC, is something I can consider, depending on the merits of the platform.

The fact that Ethereum is both the most widely used technology in crypto, and the most unreasonable in its protocol for gas fees, is frustrating, to say the least. Bitcoin is certainly more reasonable in fees compared to gas from Ether, but if I wanted to exercise my interest in one of those fantastic features of crypto, moving it to and fro, private wallets, CEX, DEX, without permission or "closed for holiday", fees from centralized payment and bank platforms, I have to consider the cost of doing business, again, unless I have so many millions or billions it simply doesn't phase me to leak $10 here, $30 there.

Litecoin has enough volume that it remains a safe option for getting in and out of positions for trading. It has safety and security, making it's decade of up time comparable to Bitcoin's 13 years. The last time I tested a transfer from my private wallet, mine was a very low priority transaction, it still happened within 45 minutes, and it cost less than one half of a penny.

When withdrawing from most exchanges, they set a withdrawal fee in keeping with what will save them a little in on-chain transaction fees, but also give a little profit to keep in their pockets. Litecoin tends to remain on the very low end of withdrawal fees on exchanges. When they keep these values relatively near the same amount month after month, even when Litecoin doubles in value, it's still usually as low as $0.30-40... from centralized exchanges.

A lot of times, I have numerous positions opened on exchange, so I consider security regularly as a trade-off in how I choose to earn and where I hope to trust value that is parked in limit orders. It is a part of the cost of doing business. I prefer trustless 100%, but DEX still has thousands of miles to journey to catch up to that all-necessary volume and liquidity it takes for me to maintain the accuracy I expect of myself.

Litecoin remains a really amazing asset if for nothing else, than to transact. Wait a minute, it seems like regardless of any other purpose crypto is mean to provide, the ability to transact is top of the list. If Litecoin reaches a point where it is maxing out the number of transactions it can handle, it will see more development in L2, as we see with Lightning network. Despite low historical levels of trading volume, and low pressure of valuation against BTC, which makes a lot of sense in numerous ways, activity on-chain, new wallets and general utility have been hitting new highs on Litecoin. These are signs that it is being sought more as a supplemental hedge, a safe haven asset like Bitcoin, and less as a trading mechanism like it was when there were fewer crypto projects occupying such high volume.

In the end, you may know of, or prefer, other projects that help to lower fees, and I might seek some of those options out from time to time. Use this idea as a template for future activity. There's nothing wrong with using a coin for it's best qualities, and trade as you wish once on-exchange. I continue to see Litecoin as useful for this as long as it remains in the somewhat safer list of widely accepted assets. Meanwhile, we have a lot of work to do to widen the acceptance of safer stablecoins, as governments attack the useful, liquid, efficient nature of crypto's better iterations of fiat.

Just a few out-loud thoughts running through Gordon's head.

Hope it makes you think of ways to creatively move your stash around with as few fees as possible!

And on that note, Crypto Gordon Freeman, for now... out.

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BitcoinGordon
BitcoinGordon

Hi! I'm Gordon Freeman (I hear they made a likeness of me in some video game... totally unrelated... or...).


BitcoinGordon
BitcoinGordon

Welcome! This is my blog for all things crypto, from my day trading and tutorials to general crypto news.

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