In a recent podcast, Bill Barhydt, the CEO of Abra discussed the Bitcoin to Litecoin shift on their exchange platform. A month ago, the Abra team announced the switching from Bitcoin to Litecoin as their underlying asset for the exchange. What led to this decision?
Bill Barhydt who is the CEO of Abra says:
“We are supporting Bitcoin and Litecoin as asset classes and we now have the ability to move smart contracts between the two. You can think of it like sidechain solution where atomic swaps can be done between smart contracts based upon either asset classes.”
The team tested the first version of the existing app which supported 20 cryptocurrencies and realized that the mining fees for simple transactions hit around 30-35 dollars, putting them in worry. Bill considers this as a poor business model as the mining fees were huge.
According to him, the app was very user-friendly with a higher mining fee. Hence they decided to re-evaluate the whole process understanding the fact that there was a potential for this to create a glitch in the future.
The Abra team decided to have another asset class that was compatible with Bitcoin and at the same time gave a little bit more on-chain scalability and lower mining fee. They looked into Bitcoin Cash, Litecoin, and other altcoins and felt that in terms of adherence to core map, SegWits support, basic binary compatibility and comparing existing Bitcoin models, Litecoin was best suited. The team immediately began the process of integrating Litecoin to Abra, which rapidly reduced the mining fee.
All worked out well and the team ended up launching the solution and are migrating users over to Litecoin from Bitcoin. The team has the ability to go back and forth, says Bill.
“It is a killer model and we look at Litecoin as the digital silver to Bitcoin’s digital gold and they complement each other very well and the entire Litecoin team is very supportive. We love their adherence, core roadmap, and they are good believers and we are off in the race with Litecoin as our next asset class.”
Further, he discussed how the Bitcoin fees affected Abra’s profit negatively during the final quarter of 2017.
“Mining fee is not based on dollar value but memory footprint up the transactions and some multi-sig contracts are by definition bigger and for Abra its double whammy. Taking this on-chain while testing, I can say $20 for you is like $30 for us.”
This isn’t the first time LTC is chosen over other currencies because it follows the same path as BTC while offering cheaper solutions, noted the interviewer.
Also read: Litecoin (LTC)! The future is here! Most consistent coin!