[ANN] Litecoin - a lite version of Bitcoin. Launched!

[Rejinx]

Litecoin version 0.5.0.5 has been released.
- added minimum fee of 0.1 LTC for low priority transactions to deter transaction spam

0.1 seems a bit high, Why not 0.01, that would be high enough to kill the spam.

Bitcoin fee is 0.0005 btc, which is $0.0011 at today's prices.
At 0.1 ltc fee, which is 0.00063 or $0.0014 at today's prices.

I think that's about right. As ltc prices rise, I will readjust the fees as necessary.

Well how about 0.05.  The reason I like lite coin is because it is the silver to Bitcoins gold.  How can that be if transfer cost is more 25% on the cheaper coin. 

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[kano]

Litecoin version 0.5.0.5 has been released.
- added minimum fee of 0.1 LTC for low priority transactions to deter transaction spam

0.1 seems a bit high, Why not 0.01, that would be high enough to kill the spam.

Bitcoin fee is 0.0005 btc, which is $0.0011 at today's prices.
At 0.1 ltc fee, which is 0.00063 or $0.0014 at today's prices.

I think that's about right. As ltc prices rise, I will readjust the fees as necessary.

Actually, I'm still unimpressed that a change to the economics has been made and the only discussion is an apparent IRC chat about it.
The change is not discussed in the litecoin forum either.

I guess you also took my comments before as 'to be ignored'
Again, it's not an issue that I made a suggestion about how much the fee should be, it's an issue that you seem to have taken it upon yourself to decide what the fee is and then implement it. and then say
"As ltc prices rise, I will readjust the fees as necessary."

Yes this is a change to the economics and since it isn't actually a proper solution to the problem, it's not something that should be changed at all without some form of agreement from the LTC users in general.
I was still getting micro txn's an hour ago.

Or are you saying that if you make a decision about what to change and what not to change that's all that is necessary?
(and I'm sure you understand what I mean by that)

Again, if you really do feel this micro txn spam is more than litecoin can handle, then don't expect litecoin to last very far into the future when there will be a lot more non-micro txn's

... and lastly I will add: do you ignore dissent or consider there might be a reason for it?

[Rejinx]

kano has a point

[coblee]

Actually, I'm still unimpressed that a change to the economics has been made and the only discussion is an apparent IRC chat about it.
The change is not discussed in the litecoin forum either.

I guess you also took my comments before as 'to be ignored'
Again, it's not an issue that I made a suggestion about how much the fee should be, it's an issue that you seem to have taken it upon yourself to decide what the fee is and then implement it. and then say
"As ltc prices rise, I will readjust the fees as necessary."

Yes this is a change to the economics and since it isn't actually a proper solution to the problem, it's not something that should be changed at all without some form of agreement from the LTC users in general.
I was still getting micro txn's an hour ago.

Or are you saying that if you make a decision about what to change and what not to change that's all that is necessary?
(and I'm sure you understand what I mean by that)

Again, if you really do feel this micro txn spam is more than litecoin can handle, then don't expect litecoin to last very far into the future when there will be a lot more non-micro txn's

... and lastly I will add: do you ignore dissent or consider there might be a reason for it?

I did not ignore your comment. I explained why your suggestion of 0.001 LTC is too low. And I also showed why 0.1 LTC is close to Bitcoin's fees in terms of dollar value. And since the purpose of the fees is to deter DDoS'ing of the network using transaction spams, having a high enough fee is important.

This is a problem that Bitcoin ran into in its early days and it has solved this problem using a complicated formula to assign a fee if the transaction is a strain on the network. The idea is that if you keep reusing coins and send them in large transactions (in bytes), then you need to pay a fee. This makes it costly for a malicious person to keep sending these micro transaction spam to try to hurt the network. But for everyday users, you will not have to pay a fee unless you are using coins you just received. Please read up on this if you want to know more: https://en.bitcoin.it/wiki/Transaction_fees

Let me repeat and state that this is not a change in the economics. Litecoin had fees that were too low and made it cheap for someone to launch this attack. So I had to fix it to make the fees in line with Bitcoin in terms of dollar value.

If you want to discuss a solution that's better than the one Bitcoin currently uses, feel free to throw out ideas. I will listen. But please don't just complain that the fees are too high. If you are the attacker, then yes, fees are too high and that's the whole point. This will not have a huge impact on normal users. Most people would agree that they would rather spend a 1/10th of a penny on low priority transactions in exchange for not having a network that's crawling due to attacks by spammers.

[bulanula]

So now coblee is a mini version of RS

Sometimes I think that on this forum all the users are just one person , especially considering how much PR BCX gives SC.

[jjiimm_64]

damn looks like i missed the discussion....

.1 ltc is the fee??   who cares what it is in pennies..  this means that If I give somebody 1 LTC.  I have to pay a 10% fee ?   

this does not seam right.  why are we basing the fee on other currencies? a litecoin is a litecoin, and now I have to pay 10 litecents to spend a litecoin.


o,  and the comment about  "I will adjust the fee"  that made me dump about 20k of my litecoins..  thinking about what to do with the rest.

[kano]

Actually, I'm still unimpressed that a change to the economics has been made and the only discussion is an apparent IRC chat about it.
The change is not discussed in the litecoin forum either.

I guess you also took my comments before as 'to be ignored'
Again, it's not an issue that I made a suggestion about how much the fee should be, it's an issue that you seem to have taken it upon yourself to decide what the fee is and then implement it. and then say
"As ltc prices rise, I will readjust the fees as necessary."

Yes this is a change to the economics and since it isn't actually a proper solution to the problem, it's not something that should be changed at all without some form of agreement from the LTC users in general.
I was still getting micro txn's an hour ago.

Or are you saying that if you make a decision about what to change and what not to change that's all that is necessary?
(and I'm sure you understand what I mean by that)

Again, if you really do feel this micro txn spam is more than litecoin can handle, then don't expect litecoin to last very far into the future when there will be a lot more non-micro txn's

... and lastly I will add: do you ignore dissent or consider there might be a reason for it?

I did not ignore your comment. I explained why your suggestion of 0.001 LTC is too low. And I also showed why 0.1 LTC is close to Bitcoin's fees in terms of dollar value. And since the purpose of the fees is to deter DDoS'ing of the network using transaction spams, having a high enough fee is important.

This is a problem that Bitcoin ran into in its early days and it has solved this problem using a complicated formula to assign a fee if the transaction is a strain on the network. The idea is that if you keep reusing coins and send them in large transactions (in bytes), then you need to pay a fee. This makes it costly for a malicious person to keep sending these micro transaction spam to try to hurt the network. But for everyday users, you will not have to pay a fee unless you are using coins you just received. Please read up on this if you want to know more: https://en.bitcoin.it/wiki/Transaction_fees

Let me repeat and state that this is not a change in the economics. Litecoin had fees that were too low and made it cheap for someone to launch this attack. So I had to fix it to make the fees in line with Bitcoin in terms of dollar value.

If you want to discuss a solution that's better than the one Bitcoin currently uses, feel free to throw out ideas. I will listen. But please don't just complain that the fees are too high. If you are the attacker, then yes, fees are too high and that's the whole point. This will not have a huge impact on normal users. Most people would agree that they would rather spend a 1/10th of a penny on low priority transactions in exchange for not having a network that's crawling due to attacks by spammers.

OK, you clearly missed the point of my comment.
Hopefully paranoia isn't the reason for that.

I have even said before that I don't really care either way about the txn fee - I just suggested a value and you said why you didn't like it.
Yeah oddly enough I did read your reply even though you imply I didn't.
I also do think 0.1 is too high (and 2 others have said that also) but again it's not about that either.

My point is about making decisions about the economics of litecoin and then implementing them yourself.
Yes the txn fees are part of the economics - if you don't understand that, then litcoin has an even shorter future then anyone might imagine.
A quick fix was implemented, based on your decision (yes you may have discussed this on IRC but seriously you need to document that here at least so anyone interested knows who decided and what was decided) but that appears to be a 'Coblee' decision not a 'Litecoin' decision.
If you have decided that 'Coblee' is 'Litecoin' then say so - don't just act that way.

The spam has stopped to me
But there are a lot of txn's still appearing - (though way less than before) - they seem to be a whole bunch of 2LTC txn's so I guess whoever is doing it is merely shuffling LTC around different accounts - probably running a few litecoind's?

[coblee]

damn looks like i missed the discussion....

.1 ltc is the fee??   who cares what it is in pennies..  this means that If I give somebody 1 LTC.  I have to pay a 10% fee ?   

this does not seam right.  why are we basing the fee on other currencies? a litecoin is a litecoin, and now I have to pay 10 litecents to spend a litecoin.


o,  and the comment about  "I will adjust the fee"  that made me dump about 20k of my litecoins..  thinking about what to do with the rest.

I've stated many times that most transactions will not incur a fee just like Bitcoin. This fee is just to deter people who send a lot of low priority transactions.

The fee is just the default fee in the default client for low priority transactions. Miners can choose to accept free transactions or not accept any transactions without a fee. This works the same way as Bitcoin.

[jjiimm_64]

I agree something had to be done..  I solo'd for over 26 hours without a block, I normally would have had about 8 in that time.  

But I dont think the gui is showing orphaned blocks. Which I know I must have had some.


Question:  if the bitcoin code has the algorithm to handle 'fee only if the network cant handle the transaction'  why doesn't the litecoin client have that.?

maybe I dont know what I am talking about.  Is there documentation to exactly what the fee structure is now?

edit:  you just answered my question in previous post...

Thank you.

[coblee]

Question:  if the bitcoin code has the algorithm to handle 'fee only if the network cant handle the transaction'  why doesn't the litecoin client have that.?

Litecoin does but the fee was set too low b/c 1 LTC == 0.006 BTC.
So I had to adjust the fee to be 200x that of Bitcoin to keep the cost to the attacker the same.

[BeeCee1]

Yes, bitcoin was at 0.01 BTC fee earlier this year. But I don't know what the fee was when Bitcoin first came out.

I'm not sure about when bitcoin first came out, but the minimum fee was 0.01 back when bitcoins went for around $0.10.

I also think a 0.01 fee for litecoin would be better than 0.1.  Are you going to open up a thread on liteco.in to discuss this?

[macboy80]

Thanx for your hard work coblee. I, for one, endorse your changes assuming you do keep up with the value:fee proportion. Perhaps a poll would calm other's concerns when it becomes time to change the fee.

EDIT: Just found the Windows binary... There's an old link in the body of the first post.

[coblee]

Yes, bitcoin was at 0.01 BTC fee earlier this year. But I don't know what the fee was when Bitcoin first came out.

I'm not sure about when bitcoin first came out, but the minimum fee was 0.01 back when bitcoins went for around $0.10.

I also think a 0.01 fee for litecoin would be better than 0.1.  Are you going to open up a thread on liteco.in to discuss this?

Yes, from what I can tell the Bitcoin fees were always around 1/10 of a cent. Anything less and it will make it cheap for an attacker to spam the network. So that's why I decided on 0.1 LTC for the fee. Anything less and the attacker will just keep on spamming. Could I have started a poll and asked people for what they wanted? Sure, but do you know what the vote would look like? Everyone would vote for very very low fees b/c no one wants to pay any fee. But people don't understand why we need a fee right now. So I actually have to make a decision to set a fee higher than what people wanted because I have to weigh the importance of using the fee to deter an attack with people's desire to have no fee.

So yes, I made a decision that I thought was best for Litecoin. I felt like I had to act quickly before the transaction spam gets too out of control. And getting everyone to understand why we needed a 0.1 LTC fee would have been an impossible task. Look how many posts I had to make on this subject, and still, most people don't even understand that the fee is not a static fee that's applied to every transaction. So if people want to keep on discussing this topic, please read this wiki page and try to understand why we need a fee for low priority transactions: https://en.bitcoin.it/wiki/Transaction_fees

Thanx for your hard work coblee. I, for one, endorse your changes assuming you do keep up with the value:fee proportion. Perhaps a poll would calm other's concerns when it becomes time to change the fee.

In the future, as ltc price goes up, I will reduce the fee to keep it at about $.001. I don't think we need to have a poll or a long discussion whenever I decide to lower the fees, right? Or do we? If people really cared, I will.

We can discuss to see if there are better solutions. I thought of tying the fee to the current difficulty, which is loosely correlated with the price. That way we don't have to constantly change the fee and we will let the market determine the fee. Gavin had ideas about letting miners set the fee somehow. But I'm sure a lot of people won't be happy about that solution. But all this will take a while to flesh out and implement. In the meantime, I made the fee structure effectively equivalent to Bitcoin. And I was surprised to see so much complaining on the forums.

o,  and the comment about  "I will adjust the fee"  that made me dump about 20k of my litecoins..  thinking about what to do with the rest.

I'm shocked to read that... I really don't know what to say.

[CAMOPEJB]

Let me shorten that for you:

most people don't even understand that the fee is not a static fee that's applied to every transaction.

Transaction fees may be included with any transfer of bitcoins from one address to another. At the moment, many transactions are typically processed in a way where no fee is expected at all, but for transactions which draw coins from many bitcoin addresses and therefore have a large data size, a small transaction fee is usually expected.

The transaction fee is processed by and received by the bitcoin miner. When a new bitcoin block is generated with a successful hash, the information for all of the transactions is included with the block and all transaction fees are collected by that user creating the block, who is free to assign those fees to himself.

0.1 LTC fee per kilobyte of transaction, but:
- If the blocksize (size of all transactions currently waiting to be included in a block) is less than 27 kB, transactions are free.
- If the blocksize is more than 250 kB, transactions get increasingly more expensive as the blocksize approaches the limit of 500 kB. Sending a transaction when the blocksize is 400 kB will cost 5 times the normal amount; sending when it's 499 kB will cost 500x, etc.

Transactions within each fee tier are prioritized based on several factors. Most importantly, a transaction has more priority if the coins it is using have a lot of confirmations. Someone spamming the network will almost certainly be re-using the same coins, which will lower the priority of their transactions.

[coblee]

Let me shorten that for you:

most people don't even understand that the fee is not a static fee that's applied to every transaction.

Transaction fees may be included with any transfer of bitcoins from one address to another. At the moment, many transactions are typically processed in a way where no fee is expected at all, but for transactions which draw coins from many bitcoin addresses and therefore have a large data size, a small transaction fee is usually expected.

The transaction fee is processed by and received by the bitcoin miner. When a new bitcoin block is generated with a successful hash, the information for all of the transactions is included with the block and all transaction fees are collected by that user creating the block, who is free to assign those fees to himself.

0.1 LTC fee per kilobyte of transaction, but:
- If the blocksize (size of all transactions currently waiting to be included in a block) is less than 27 kB, transactions are free.
- If the blocksize is more than 250 kB, transactions get increasingly more expensive as the blocksize approaches the limit of 500 kB. Sending a transaction when the blocksize is 400 kB will cost 5 times the normal amount; sending when it's 499 kB will cost 500x, etc.

Transactions within each fee tier are prioritized based on several factors. Most importantly, a transaction has more priority if the coins it is using have a lot of confirmations. Someone spamming the network will almost certainly be re-using the same coins, which will lower the priority of their transactions.

Thanks. I hope it's clear why we need this transaction fee. Since this is a p2p network, sending large transactions (in terms of bytes) will add strain to the network to propagate those transactions and to store them. Look at how much the block database has grown from these spam transactions. So the increased fees is to combat that. If you want to waste other people's resources, you can but you need to pay for it. And most transactions will still be free.

[Schwede65]

Thanks. I hope it's clear why we need this transaction fee. Since this is a p2p network, sending large transactions (in terms of bytes) will add strain to the network to propagate those transactions and to store them. Look at how much the block database has grown from these spam transactions. So the increased fees is to combat that. If you want to waste other people's resources, you can but you need to pay for it. And most transactions will still be free.

Congrats to that quick decision combined with a new client.

Now its much more expensive to spam around and the "normal" transaction stay cheap as before.

That was the point to be solved ---> excellent work!

[ovidiusoft]

Thanks. I hope it's clear why we need this transaction fee. Since this is a p2p network, sending large transactions (in terms of bytes) will add strain to the network to propagate those transactions and to store them. Look at how much the block database has grown from these spam transactions. So the increased fees is to combat that. If you want to waste other people's resources, you can but you need to pay for it. And most transactions will still be free.

But isn't that the wrong solution? Isn't the purpose of any crypto-currencies to be successful and attract a lot of transactions? Having a lot of transactions (of course, not spam, but that's irrelevant) should be the target, am I correct? If so, then arbitrarily forcing their number down is the wrong action...

I was hoping to see some creative development in the other direction - having a lot of transactions while maintaining a small footprint on the blocksize and network load.

[coblee]

Thanks. I hope it's clear why we need this transaction fee. Since this is a p2p network, sending large transactions (in terms of bytes) will add strain to the network to propagate those transactions and to store them. Look at how much the block database has grown from these spam transactions. So the increased fees is to combat that. If you want to waste other people's resources, you can but you need to pay for it. And most transactions will still be free.

But isn't that the wrong solution? Isn't the purpose of any crypto-currencies to be successful and attract a lot of transactions? Having a lot of transactions (of course, not spam, but that's irrelevant) should be the target, am I correct? If so, then arbitrarily forcing their number down is the wrong action...

I was hoping to see some creative development in the other direction - having a lot of transactions while maintaining a small footprint on the blocksize and network load.

Lots of transactions is not bad. Large transactions that sends small amounts of coins to lots of outputs is bad. The fix is not arbitrarily forcing the number of transactions down. It is only going to incur a fee on low priority transactions, which are those that have lots of inputs and/or outputs and uses small amount of coins that don't have a lot of confirms. Again, please read the wiki: https://en.bitcoin.it/wiki/Transaction_fees

[kano]

Still happening: block: 34123, 5 minutes ago ...
(and http://explorer.liteco.in/ gives a bad gateway error so I can't give a link)

Edit: the block value is 50.22050000 so I guess they don't mind paying the fee.
Thus the higher fee (higher than bitcoin) isn't completely successful.
Block size 412,072 bytes (using my own block explorer I wrote)

[coblee]

Still happening: block: 34123, 5 minutes ago ...
(and http://explorer.liteco.in/ gives a bad gateway error so I can't give a link)

Edit: the block value is 50.22050000 so I guess they don't mind paying the fee.
Thus the higher fee (higher than bitcoin) isn't completely successful.
Block size 412,072 bytes (using my own block explorer I wrote)

It's still happening because some miners have not upgraded and they are happily include the spammer's transaction that don't include enough fees.
If you look at http://blockexplorer.sytes.net/block/9171504e9427f74c02a0b2ad6167832f974ee2959135025a8407b7e9f4a74cef you will see that his transactions are being charged less than 0.1 ltc.
If he was following the new fee rules, we would have need to pay 200x the fees he paid, or 200 * 0.2205 = 44.1 ltc.
So until enough people start to use the new code, you will still see these transactions creep in. Of course, if he had the resources, he could find his own blocks and pay no fees, but he's not doing that right now.

The other disturbing thing I'm seeing is that after the fix has been released, he started sending 2 ltc to himself and maxing out on the 4kb of free transactions per blocks. So you see those blocks with 14 transactions: http://blockexplorer.sytes.net/chain/Litecoin?count=500
13 of these transactions + the generate transaction will max out the amount of free transactions allowed in the block. I know it's the same guy because I followed his transaction back and saw that the same coins were used in both of these attacks. Just look at this transaction: http://blockexplorer.sytes.net/tx/456af81d3bfa3d92ca03e04066aaceca64babeec961dd1474026706eaa4459d9
Some of those coins were used in the 2 ltc spam and the rest were used in the 0.00000001 ltc spams. This guy is really annoying since he seems to have a deep knowledge about how to take advantage of the transaction fee rules.

From the wiki:

If the blocksize is over 4kB, free transactions in the above rules are only allowed if the transaction's priority is above a certain level.

So 14 of these transactions are costing him nothing b/c he's sending them to himself. This is not as bad as the first attack, but it will still grow the chain by about 2.3mb a day. (4kb * 576 blocks)
This is not a big problem with bitcoins, because Bitcoin has a lot of honest transactions that use up the 4kb in the block, so these spammy low priorties transactions will take forever to get included in a block. So a similar attack on bitcoin is pointless. Since Litecoin is a new chain with not that many honest transactions, it's silly that we are forced to grow at 2.3mb/day by this Litecoin-hater.

I will need to think of a way to combat this. The first thing that comes to mind is to just reduce the 4k exemption for free transactions per day to something much smaller. Maybe instead of allowing 13 of these transactions, we only allow a few to get included in a block. I can reduce the 4k exemption to 1k. This would reduce the chain size increase from 2.3mb/day to 575kb/day. The downside of course is that free transactions might take longer to get written into blocks. I would have to double check, but I don't think the client will let you create transactions without enough fees. So this only applies to people that modify their client to do 0 fees. Let me know what you guys think.