Sometimes referred to as “the silver to Bitcoin’s gold,” Litecoin (LTC) is one of the oldest cryptocurrencies being created in 2011. The intention of Litecoin was never to compete with Bitcoin but was instead intended to grow alongside Bitcoin.
Originally introduced on a Bitcoin forum as a “lite version of Bitcoin,” it has never steered away from what it was originally created for.
After being around for almost 10 years, Litecoin is extremely recognizable to veteran cryptocurrency investors. The project has consistently exceeded expectations. LTC is a top 20 cryptocurrency based on market cap.
Faster transactions and cheaper fees make Litecoin a great option for people to use LTC for everyday purchases.
One of the flaws some people see in crypto is trying to figure out the utility and ability to spend it. Although peer-to-peer trading is always an option with cryptocurrency, people aren’t looking to pay super-high fees in order to make transactions. For example, Ethereum’s relatively high gas fees deter people from spending, trading, or selling their Ethereum. In contrast, Litecoin allows for quick and cheap transactions making it one of the first choices when it comes to spending and trading.
Although not great for the coin’s reputation, Litecoin is one of the currencies of choice on the dark web due to its anonymity and cheap fees. In terms of everyday transactions that may be seen on the dark web, many people prefer it due to the cheaper fees and quicker transaction times making Litecoin superior to Bitcoin for payment of online services and products.
Even if being considered the dark web’s choice may not be something to brag about for the developers of the network, this does go to show the use cases that Litecoin has for the average person on the internet.
Another utility that Litecoin offers now is being hosted on Paypal’s Venmo service. Venmo allows people to easily send money to one another for goods and services in a way as simple as just using an app. Litecoin being on Venmo means that people can now send LTC to friends and family easily. Paying someone in LTC could now be as simple as sending somebody 5 LTC when you owe them money.
As the world shifts to crypto, this will become more common as a lot of people would prefer crypto as payment as opposed to fiat.
Litecoin was developed by a former Google software engineer named Charlie Lee. Lee was an online poker player and realized the importance of having control over your money. After investing in Bitcoin, Lee started to realize how many other coins there are that don’t have an actual purpose. He then decided to pursue the project to allow people to use it for everyday purchases through quicker transaction times and lower fees.
Both Litecoin and Bitcoin have many similarities including their mining process being proof-of-work ecosystems. Despite having similarities, the differences are what help make Litecoin a unique asset.
How Litecoin Works
Litecoin follows many of the same mining principles as Bitcoin with a few key differences.
Bitcoin is mined through the proof-of-work method using the SHA-256 consensus mechanism whereas Litecoin uses a unique consensus mechanism called Scrypt.
Scrypt allows for LTC to be mined by using a regular computer instead of the expensive, powerful mining computers that are required for Bitcoin.
The use of regular computers helped make it more decentralized by allowing the average contributors to the network to gain the mining reward.
Unfortunately, Bitcoin’s powerful ASIC mining computer was replicated for Litecoin mining and created a faster and more powerful computer that competed with a regular person’s computer and won every time. Now, Litecoin is mined through these powerful mining pools which have made it more centralized.
The Litecoin transaction times and fees are what really sets this coin apart from the alpha, Bitcoin. The Litecoin blockchain can process 56 transactions per second as opposed to Bitcoin’s dependence on the number of transactions overloading the blockchain which can lead to slower transaction times and delays on the network. Litecoin’s transaction fee is an average of 0.001 LTC per transaction, again, opposed to Bitcoin’s which is dependent on the size of the transaction. A transaction on the lightning network can take as little as 2 minutes to complete.
Litecoin became the first cryptocurrency to adopt the lightning network which allowed for even cheaper and faster transactions than originally intended during the creation of Litecoin.
In May of 2017, the first transaction was sent on the lightning network from Zurich to San Francisco. This transaction of 0.00001 LTC was sent in under one section. These instant and almost free transactions on the lightning blockchain allow for everyday purchases.
To put it into perspective, if someone was charged a few dollars to use their debit card, chances are, they would prefer to use cash. The implementation of the lightning network allowed for people to use Litecoin at virtually no cost which increased the use case for Litecoin versus Bitcoin.
Litecoin Future Updates
Litecoin is expected to undergo the largest update to its network ever in the short-term future. The highly anticipated ‘Mimblewimble’ (MWEB) update is expected to be released in August of 2021 which a lot of analysts predict is going to be the peak of this bull cycle.
The mimblewimble update has been in development for two years and plans to upgrade Litecoin’s scalability issues. This highly anticipated update could cause a massive price move up until August as long-term Litecoin holders have been waiting for nearly two years.
Similar to Bitcoin, Litecoin is a part of the few cryptocurrencies that are going to be offered through Paypal in the very near future. With the new Paypal integration, customers are going to be able to buy, sell, and hold cryptocurrency through their Paypal account.
Through Paypal checkout, customers will be able to spend their crypto in many online checkouts. As of right now, Paypal will only offer Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. The new partnership is going to bring institutional attention to the project being one of the only four cryptocurrencies offered.
Price History and Prediction
From mid-year of 2020 to mid-year 2021, Litecoin’s price has seen a dramatic increase of 1055.07%. Litecoin hit an all-time high of $410.26 which is a 16562.9% increase from its all-time low of $1.50 which was only 6 years ago. Many analysts expect to see a $1000 Litecoin in the next few years. September of 2023 is when the next halving takes place which will decrease supply and increase demand, ultimately expected to drive the price even higher in 2023.
Litecoin copies a lot of Bitcoin’s attributes in general but you can especially see Litecoin follows the trends in the Bitcoin price as well. Much like a lot of altcoins, when Bitcoin sees massive run-ups, their prices will usually tend to follow. As more money goes into the cryptocurrency market, a lot of this money gets diverted to altcoins eventually which is why Litecoin, being ranked number 15 in terms of market cap, is a great investment.
As shown in the 2019 bear market where Litecoin’s price held up and stayed consistent, many people believe that Litecoin is more resistant to bear markets than other projects which also makes this choice a more appealing long-term hold for investors.