There are over 7 000 cryptocurrencies and counting each has its use case and tokenomics now, in theory, these two factors are meant to be the selling points for that coin or token. In practice, however, whether crypto does well often boils down to recognizability and branding one of the cryptos that have both is Litecoin. It’s been around for almost 10 years and is one of the oldest surviving LTC coins on the market.
This makes it recognizable to investors who have come across crypto in the past. Litecoin has also branded itself as the silver to bitcoin’s gold, and this simple idea has played a key role in its survival over the last decade. However, Litecoin has not just survived, it has thrived, and in recent weeks it’s been making its way back into the top 10 cryptocurrencies by market cap, as it turns out.
There is more to this price action than meets the eye, and today I’m going to tell you why Litecoin needs to be on your radar. I need to hit the brakes because there is a disclaimer I need to state. Nothing in this article is investment advice, it’s just educational content, and I hope that will suffice.
NFTs coins, tokens, fud, and FOMO are just a few of the things discussed here at the coin bureau. So, let’s get down to business with Litecoin Litecoin was created by a software developer. Charlie Lee, Charlie holds a masters in computer science from MIT and worked as a software engineer at Google before becoming one of coinbase’s earliest employees serving as engineering director until 2017. Charlie is also an avid poker player and this happens to be why he got involved in cryptocurrency in the first place in April 2011 regulatory authorities in the United States, cracked down on the largest online poker websites in the country, effectively shutting them down for good. This made Charlie's quote realize the importance of the freedom of money, and this inspired him to begin dabbling in bitcoin and other cryptocurrencies. It didn’t take long for Charlie to see the same thing we see in crypto today.
2. Enrich Creators
Hundreds of coins exist for no other purpose than to enrich their creators. That’s why Litecoin had a fair launch in October 2011 with no pre-mine. This means no LTC was allocated to Charlie or any of the other chaps working on Litecoin before its launch, Charlie mined. Litecoin, along with everyone else in the crypto community, in much the same way as Satoshi did with bitcoin in 2009, as the name suggests, Litecoin was designed to be a lighter version of bitcoin, whereas BTC is a stall of value. LTC is meant to be the sound money that people will use for everyday payments. This is why Charlie calls Litecoin the silver to bitcoin’s gold and why he advises people to invest in bitcoin before anything else, including Litecoin, not financial advice.
I'm sure that said many have called Charlie’s, true motivations into question ever since he sold all his LTC at the peak of the previous bull market just a few months after he quit his job at Coinbase now Charlie says he sold his LTC because he could see How much of an influence over its price he had through his Twitter account, which had an enormous following this didn’t do much to quell the concerns of the crypto community, who argued that Charlie was jumping ship. This earned Charlie the title of the most hated person in cryptocurrency in 2018., now to Charlie’s credit, he continues to work as one of Litecoin’s core developers and is also the managing director of the Litecoin Foundation, a Singaporean non-profit that is funded by donations and merch sales.
3. The Script
What's more, is that Charlie matched all the donations made towards the development of Litecoin’s upcoming privacy features before we get into those, though it’s probably a good idea to understand how Litecoin works? Litecoin is basically like bitcoin with a few modifications for starters. Instead of the sha-256 proof-of-work consensus mechanism, Litecoin uses a special proof-of-work consensus mechanism called script. The script was meant to make it possible to mine LTC using a regular computer. This would make the Litecoin blockchain more decentralized, as anyone would be able to participate on the network. This is in contrast to bitcoin’s sha256 mining algorithm, which was only mineable using expensive specialized computers called ASICs by the time Litecoin rolled around now.
Unfortunately, it didn’t take long for those clever crypto mining manufacturers to create a script ASIC 2. and since that time the Litecoin blockchain has become gradually more centralized with eight mining pools, accounting for most of its mining activity. One little-known fact about Litecoin is that doge is merged mined with LTC now without getting into the weeds.
4. Merge Mining
Merge mining makes it possible to mine two cryptocurrencies without using any extra power. Dogecoin merge mining began after Litecoin founder Charlie lee met with dogecoin founder Jackson, palmer 2014, and warned him that the dogecoin blockchain could be manipulated by its miners. Merge mining with Litecoin would keep dogecoin’s blockchain secure. According to Jackson, dogecoin is a quote merged at the hip with Litecoin; in other words, dogecoin’s survival depends on Litecoin. This is why part of me suspects that Litecoin miners are partially to blame for dogecoin’s, crazy price action, and you can get my full take on dogecoin by using that link up there in the top right. Besides, mining Litecoin also differs from bitcoin when it comes to speed, cost, and tokenomics.
The average LTC transaction usually costs no more than a few cents and takes about two minutes to complete. This works out to about 56 transactions per second in terms of tokenomics. LTC has a maximum supply of 84 million, which is four times more than BTC's maximum supply of 21 million, like bitcoin Litecoin, has a four-year halving cycle, meaning the number of LTC miners get from each block is cut in half when the first Litecoin block was Mined the reward was 50 LTC.
5. Falling Prices
The first halving occurred in august 2015, cutting the block reward to 25 LTC. The second Litecoin halving happened in august 2019, which was cut in half again to 12 and a half LTC. The next Litecoin halving is scheduled to take place in august 2023 and though some websites suggest this reduction in supply. Is the driver behind LTC's price action? LTC remains highly correlated to BTC. This means that BTC is the primary driver behind LTC's price action, and this is the case for most other cryptocurrencies. Now I’ll get back to the price action of LTC in just a bit.
The most interesting thing about Litecoin is that many of the upgrades added to the Litecoin blockchain were subsequently added to the bitcoin blockchain. These upgrades include segwit, which reduces the amount of data in each block and allows the blockchain to process more transactions per second, and the lightning network, which makes it possible to create a payment channel where multiple transactions can be sent between two parties for a fraction of the Cost and atomic swaps cross smart contracts that make it possible to trade different cryptocurrencies directly peer-to-peer the next tech to be added to the Litecoin blockchain is a privacy protocol called mimblewimble. Any Harry Potter fans watching will know that mimblewimble is the tongue-tying curse that scrambles a person’s speech.
6. MimbleWimble Privacy Protocol
The mimblewimble privacy protocol was proposed by an anonymous developer in 2018 and it’s the same protocol used by the grin privacy coin. Now how mimblewimble works are outside the scope of this article, but the short of it is that it hides the wallet addresses involved in the transaction. Only the total amount transacted between them can be seen. The Litecoin foundation commissioned a grin developer to code mimblewimble for Litecoin. This code was completed in March and is currently being audited in preparation for implementation. In contrast to privacy, coins like grin privacy will be optional on the Litecoin blockchain. This will be possible thanks to another technology called extension blocks. At the conceptual level, you can think of extension blocks as being a side chain or layer 2 for Litecoin. If you want your Litecoin transactions to be private, you can send your LTC to the mimblewimble extension chain that runs parallel to the Litecoin blockchain and transact on it.
Instead, the cool thing about Litecoin’s mimblewimble implementation is the small amount of data it handles when sending a transaction means it could double Litecoin’s tps when transacting in private. Moreover, exchanges are not obligated to support the mimblewimble chain, meaning there shouldn’t be any risks of LTC getting delisted. The same way other privacy coins have been in recent months now, speaking of LTC, it recently surpassed its previous all-time high of 355 dollars and is showing no signs of slowing down. This is for many reasons. For starters, LTC is one of the four cryptocurrencies PayPal announced.
7. Pay using Crypto
It would be supported in October last year, more recently PayPal announced that it will be allowing US customers to pay for goods and services using crypto, which includes LTC, which can already be used to pay for goods and services in the united states via the Litecoin visa Debit card introduced by the Litecoin foundation last summer, oddly enough flair network, also recently announced that it would be airdropping its spark token to LTC holders now, for that unfamiliar flair network is a cryptocurrency project funded by ripple’s investment arm. That’s looking to add smart contract functionality to xrp, it seems they’re looking to do the same for LTC, and I think I have a hunch as to why that might be I’ll explain why, at the end of the article, in addition to retail investors, LTC has also seen its fair share of institutional interest over the last few months. Most of this money has come through greyscale’s, Litecoin trust, which bought up 80 percent of all the LTC mind. In February, institutional demand for LTC has been so high that they have been paying a whopping 18x premium for exposure via grayscale’s Litecoin trust.
8. Circulations and Holdings
Now, according to Charlie Lee, greyscale alone, is likely holding more than three percent of all the LTC in circulation, and that was back in March April, Litecoin ETPs started trading on stock exchanges in Germany and Switzerland, both of which are physically backed i.e. The issuer of the etp has to buy an equivalent amount of LTC to top it all off. Many expert investors believe that retail traders were converting their dogecoin profits into Litecoin on Robinhood. This is the apparent driver behind LTC's, most recent price pump. If you’re wondering how high LTC could go well, this depends on BTC if BTC pulls a 2 or 3x.
I reckon we would eventually see a similar move for most large-cap alts, including LTC, compared to other popular cryptocurrencies. LTC has the edge when it comes to tokenomics a maximum supply with low emission, no pre-mine, and equitable coin distribution. Charlie Lee also claims that he still doesn’t hold any LTC beyond what he needs for testing things like new payment methods and mimblewimble.
9. Privacy Payments
Unfortunately, there’s no way of knowing for sure, because Charlie has not made his wallet address public like Ethereum Vitalik Buterin has Vitalik is a billionaire now, by the way, in contrast to other top cryptos Litecoin has a pretty limited use case and is nowhere near close to Being a top performer in its payments niche, as I record this, article LTC is the 11th largest cryptocurrency by market cap, and I have a hard time seeing how it could move any further up the ranks. This is because there are dozens of seriously legit smart contracts. Cryptocurrencies that are building out massive ecosystems and those that haven’t already surpassed LTC, probably will in due course still assuming BTC does pull a 2x or 3x. I could see LTC hitting a thousand dollars by the end of this bull market. There is a small possibility. It could go much higher than that, and this depends on what happens with Litecoin’s implementation of mimblewimble.
When Litecoin implements mimblewimble, it will become a part of cryptocurrency’s privacy payments, a niche that has much less competition. The problem here is that regulators are not a fan of total privacy, and this is why many exchanges have delisted monero, zcash, and other privacy-preserving cryptos, while Litecoin’s implementation of mimblewimble might make it immune to the same scrutiny as a standard privacy coin. It could draw the attention of regulators for other reasons.
LTC is one of the most popular cryptocurrencies on the dark web already, primarily due to low transaction fees fast transaction times, and no lengthy wallet synchronization like monero. Not only that, but LTC is one of the easiest. Cryptocurrencies to get hold of, in addition to being on PayPal, Robinhood, and the revolut banking app. There are over 15 000 LTC ATMs around the world to put things into context. That’s about the same or possibly even more than the number of bitcoin ATMs out there. Not all of these ATMs require personal identification and many of them allow you to buy and sell crypto using cash as well as taken together.
This means that when Litecoin adds support for member wimble, LTC could unironically become one of the best privacy-preserving currencies on the planet. This is an insanely bullish case for LTC, but the regulatory backlash could crush that momentum overnight. So, this begs the question why the hell are institutions buying so much Litecoin? Well, I can’t say for sure, but I can think of a few reasons for starters.
There’s that recognizability and branding Litecoin is everywhere, and it’s been around for a long time. The idea that LTC is silver and BTC is gold is a hard one to kill many institutional investors who are paying attention in 2017. Probably remember the classic BTC eth LTC combo, even if this is their first encounter with crypto the fact that Litecoin tends to follow bitcoin wherever it goes, means LTC, constantly gets exposure and validation as controversial as privacy is institutions seem to be big fans of it.
So much so that grayscale is trying to put together a monero trust now this makes a lot of sense when you think about it. If you have millions of dollars in crypto, would you want your friends, family clients, or customers to see your wallet balance every time you make a transaction? After all, if the government phases out all the cash and kills privacy, how will all the big banks and businesses continue to engage? Shall we say extracurricular activities anyways besides mimblewimble Litecoin doesn’t seem to have much else on the horizon and the actual date for implementation has not yet been set like bitcoin and Ethereum? Litecoin is open source and anyone can submit a Litecoin improvement proposal or lip surprisingly.
There are only three lips and the two that are yet to be enacted relate to mimblewimble. What’s even more concerning is that the Litecoin GitHub has seen next to zero activity in recent months. However, this seems to be because most of the activity is taking place on the Litecoin talk forum, which has been incredibly active as of late core developers also seem to be quite active on Reddit, and one of them recently noted that they’re in the process of putting together a concrete roadmap flair network is also scheduled to airdrop its spark token to light coiners in June, and this could turn Litecoin into A hotbed of new decentralized applications. In the meantime, the Litecoin Foundation is working on creating new partnerships and expanding LTC's use cases. I predict that we will see many more bullish announcements about Litecoin in the coming months and these will continue to carry LTC to new all-time highs on paper.
Litecoin is one of the best cryptocurrencies on the market. It has all four qualities I mentioned in the introduction. A use case as a medium of payment super robust tokenomics, global awareness and adoption, and the best slogan in crypto, the silver to bitcoin’s gold Litecoin was also built by an insanely smart developer and continues to improve over time.
13. Lacking Transparency
In practice, though, Litecoin seems to be lacking in more than one department for one. Transparency has not been its strong suit and there’s no question that Charlie selling his LTC back in 2017 was very bad optics for the project. I think it’s possible that Charlie was legitimately concerned about accusations of price manipulation by the likes of the sec. This is what’s happening to Elon musk right now, because of dogecoin, but the difference is that Elon musk has more than enough money to make that problem go away his infamous 420-tesla tweet being a prime example, seeing how active Charlie has been in his advocacy of Litecoin is a good sign, but I still can’t help but shake the feeling that there’s more than meets the eye. For example, I suspect that flair network’s decision to airdrop its spark token to Litecoin holders was orchestrated by the Litecoin foundation. Charlie has noted on multiple occasions that he’s usually the one who pens these sorts of deals, and he is consequently the first one to know about them.
I reckon this deal was a win-win for both parties. Since flair network can argue, it’s not building exclusively for ripple. If the sec comes knocking and the price of LTC will appreciate thanks to the additional use case. Moreover, as hard as the Litecoin Developers are working, it seems like most of the heavy lifting is being done by other Developers. They paid i.e the grinning guy for mimblewimble. Conversely, you could argue that this slow pace of development is necessary when dealing with developments such as these bitcoins' development has still been much faster than bitcoins, and this might be yet another reason why institutions are so keen on Litecoin Litecoin has the unofficial title of bitcoin’s Test net and this would logically make it valuable to institutions that are investing heavily in bitcoin. It also means that we could see private BTC transactions in the next year or two with as many questions as there are around Litecoin. One thing is for certain: so long as governments keep printing money, cryptos with robust tokenomics will continue to grow, and that includes Litecoin.
Thank you for reading.