An Introduction To Litecoin
Litecoin currently stands as the world’s 7th largest cryptocurrency with a market cap of just over $3 Billion dollars. Often dubbed as the silver to Bitcoin’s gold, Litecoin has been one of the longest established crypto project that has weathered a number of bear markets a tough times to remain relevant in the space.
As outlined on the Litecoin website “Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world”. If this sounds familiar to Bitcoin, that is because it is. Litecoin is based on the Bitcoin codebase and can be classified as a digital currency.
Litecoin’s Selling Point
Litecoin was founded by Charlie Lee, who famously sold all his Litecoin at market highs in 2017, but we will come back to that later. He wanted to create a more lightweight version of Bitcoin and intended to do this by reducing the amount of time it required to confirm new transactions. Litecoin employs a 2.5 minute transaction confirmation time as compared to Bitcoin’s 10 minutes.
The second thing he wanted to alter was the mining algorithm in order to allow more people to participate in the Litecoin network. Litecoin mining therefore uses the scrypt algorithm, which is more energy intensive than Bitcoin’s Sha-256. With Sha-256, the only way that Bitcoin is now profitable to mine is with ASIC mining GPUs. These expensive GPU’s make it hard for people with lower access to capital to participate in the Bitcoin network. Lee did not wish for LItecoin to become dominated by ASICs and so, created an algorithm that was less efficient for ASICs and more accessible to everyone else. It is very much still possible to mine Litecoin with ASICs but scrypt gives smaller player the opportunity to do so also.
Mr. Lee (@satoshiLite on Twitter) has been leading the Litecoin project since its inception. As we mentioned above, Charlie sold all of his Litecoin holdings in December of 2017. The move caused much speculation as he sold all his Litecoin near market highs at $320 each. Today, Litecoin sits around $54 per coin. Charlie’s move irked many people at the time with them believing he was cashing out on the phenomenal run up in price of Litecoin. While they may be right, Lee has justified his move on many levels and still remains 100% committed to the Litecoin project today.
While many criticised Lee for this move, it can also be seen as a way to further decentralise power within the Litecoin project. We know at this stage that decentralisation is at the core of what most cryptocurrency projects are about.
Litecoin in 2018
Like much of the crypto projects this year, Litecoin has had quite the fall from grace since the beginning of 2018. The recent bear market has raised a number of questions about the validity of a number of projects in the space. It seems that in tough market times like this, more and more people become Bitcoin maximalists and fail to see the value in many other altcoin projects.
With this is mind, Charlie Lee has spoken out about the value that the Litecoin project provides and the benefits of this digital currency. His recent tweet storm sums up some of these nicely:
“Litecoin has one of the most secure networks of all altcoins. Litecoin has over $150MM of ASIC hardware protecting it. Litecoin dominates Scrypt mining by far.”
“Litecoin has a ton of liquidity, which is important for people to get in/out of LTC. It is on practically every fiat and crypto exchange (Gemini soon), even more than ETH.”
“Litecoin is supported by 9+ payment processors: Aliant Payment, BTCPay, Coinbase, CoinGate, CoinPayments, Globee, GoCoin LTCPay, and TravelbyBit. This makes it extremely easy for merchants to accept LTC. There are too many LTC merchants to count! #PayWithLitecoin”
“Many of the LN clients and apps also support LTC because they see the value of Litecoin. With atomic swaps, LTC interoperates with BTC on the Lightning Network.”
“Litecoin processes $200MM worth of transactions each day. And the network has worked flawlessly for 7 years!”
“Litecoin works today as a global decentralized sound money, that can’t be censored, can’t be reversed or taken away, can’t be counterfeited, and can’t be devalued. 🚀”
Many of the above benefits are hard to argue with. Litecoin is well established and one of the major benefits we find is its liquidity. This was especially true when Bitcoin transaction costs rose at the beginning of 2018. Litecoin was a great alternative for many who needed to send and receive cryptocurrency between different wallets, accounts and exchanges.
The Litecoin project is so well established that it has become a staple in the portfolio of many cryptocurrency investors and traders. Its reliability and liquidity make it a great asset for fast processing and transfer between wallets.