At the time of writing this Litecoin review article, Bitcoin seems to be regaining some of the ground it had lost from its recent price dump. It is now currently standing at a whopping 49,505.65 USD, a more than double increase from its 2017 all-time high of just below $20,000! This makes Bitcoin one of the most highly sought after – but also a very expensive – cryptocurrency. Given the high price expectations, we can even go so far as to say if you were one of the few that managed to get just one Bitcoin, consider yourself highly privileged.
With that said, with Bitcoin now becoming increasingly unreachable for many retail investors, some are already looking for other options elsewhere. The second best option would obviously be Ethereum, but with a current price of $1,566.96, it is also becoming rapidly expensive to buy. Unlike Bitcoin, though, Ethereum is a utility token, meaning that it is a token that is mostly utilized to participate in its ecosystem.
In order to initiate any smart contract or transaction, you would need to pay them in Ethereum's native token, ETH. Moreover, unlike Bitcoin, Ethereum has a current supply of 114,877,919, with no max supply. Developers are currently working on EIP-1559 which is supposed to make the token deflationary by burning a portion of the transaction fees, but that still doesn't change the fact that ETH is a utility token, not a coin to be used for the exchange of value. And don't get us started on those dreadful gas fees…
So then, is there any other crypto coin out there that cannot only be a transfer of value but is still also relatively inexpensive for retailers? Is there a coin that has not only managed to prevail, despite the fierce competition, aka staying power, but also encompasses a type of ‘upgrade flexibility' that we do not usually see in other old coins? Well, look no further because there happens to be such a coin, one that has managed to stay in the top 10 since its origin. We are, of course, talking about Litecoin, the crypto space's digital silver.
But what is it about Litecoin that makes it so unique? Just how did it manage to stay in the top 10 for all of these years? Does it have a max supply, and what upgrades did it go through? This Litecoin review article will answer all of these questions. We will dive down to discuss tokenomics, who its founder was, why it was created, and why having a little bit of that digital silver might be worth your while.
What is Litecoin?
Litecoin is a cryptocurrency or crypto coin that is used as a medium of exchange/value, as well as a store of value. Created on October 13, 2011, it is one of the oldest cryptocurrencies out there, older than Ethereum. It was designed to be, as the name implies, a lightweight version of Bitcoin. Meaning it is cheaper, faster, and more secure.
As with Bitcoin's original intention, Litecoin was designed to transfer value or act as a medium of exchange for goods throughout the world, bypassing the typical middlemen that are banks, investment firms, government bureaucratic financial institutions, and other barriers.
This means that any merchant, whether in your local area or thousands of miles away, that accepts Litecoin as payment will allow just about anyone to pay for its goods and services with a few Litecoins or LTC coins. And unlike Bitcoin, where you would have to wait for at least 10 minutes or more for the transaction to be completed, transactions in Litecoin are way faster.
Litecoin has a maximum supply of just 82 million, more than Bitcoin, but far less in quantity than some of the other top cryptocurrencies, such as Ethereum, Cardano, Polkadot, XRP, Chainlink, and others. This makes Litecoin relatively scarce, which in turn has more of a tendency to experience a price increase. In addition, the Litecoin blockchain can support up to 56 transactions per second, making it much faster than Bitcoin's seven transactions per second or even Ethereum's 15 transactions per second.
When it comes to mining, Litecoin uses a proof-of-work algorithm, just like Bitcoin. However, there is a slight difference between the two.
Bitcoin uses SHA-256 hashing, which makes the ability to solve complex mathematical puzzles much more difficult whenever transactions increase. Although initially, it was possible to use a laptop to mine Bitcoin, these days, you would need an Application-specific Integrated Circuits or ASIC. This makes mining Bitcoin extremely expensive and makes it almost impossible for the average person to get into. It has also been the primary reason why Bitcoin miners have been coming together to create mining pools.
Litecoin, on the other hand, uses a script algorithm, which only utilizes graphics-processing units or GPU. This makes Litecoin much less costly and more accessible to those who are interesting in supporting the network and earn Litecoin.
Another benefit has to do with Litecoin's security. Like Bitcoin, its network is supported by many nodes, making it almost impossible and extremely costly for anyone to conduct a 51% attack on the network. This makes Litecoin highly secure to use.
Litecoin was founded by the highly regarded Charlie Lee. A former Google software engineer employee, Charlie, who wanted to provide a ‘lite version to Bitcoin.' An early cryptocurrency adopter, Lee was an early Bitcoin miner before coming up with his own cryptocurrency that was in every way less cumbersome than Bitcoin.
Lee was also formerly Director of Engineering for Coinbase between 2015-2017 before stepping down to pursue other ventures. Since then, he has been outspoken about Litecoin and cryptocurrency as a whole and is currently Managing Director of the Litecoin Foundation.
Who is this Product for?
In a nutshell, Litecoin is for individuals who seek a relatively less expensive, faster, and easier way to transfer or exchange value for something tangible between two parties. In addition, it is also a way to store your wealth in the long run.
Moreover, it is also an attractive alternative for merchants in several ways. Firstly, they would not only be integrating their business into the crypto world but will also be able to use it themselves as an exchange of value. For example, if a restaurant accepts Litecoin as payment, instead of taking it to an exchange and trading it for fiat currency, the restaurant owner can instead use the crypto coin to buy certain supplies or other products he would need for his restaurant. Neither the bank nor any method of payment would be involved.
In addition, businesses would also be hedging their profit against the never-ending fiat inflation. Like any investor, businesses would be protecting their wealth and, just like any investor, they would be diversifying.
Another thing that makes Litecoin unique is that it is one of the most widely accepted and used cryptocurrencies. Almost every exchange out there lists Litecoin for buying and trading. This obviously includes the most well-known exchanges such as Binance, Coinbase, Kraken, Crypto.com, and Huobi Global. You literally cannot miss it. Litecoin is also accepted as a form of payment by more than 2,000 merchants worldwide.
The Litecoin Foundation has posted some of the most well-known enterprises that have integrated the LTC coin into their choice of payment.
You also cannot forget the number of institutions that are quickly purchasing Litecoin for their clients, thereby causing a supply shortage. In October of last year, PayPal announced it would integrate Bitcoin, Litecoin, Ethereum, and Bitcoin Cash into its method of payment to its 346 million active users and merchants worldwide. This announcement should not be understated. Litecoin, the 9th most popular cryptocurrency in the world, was chosen, out of thousands of other cryptocurrencies, to be one of the first ones to allow Paypal's clients to use it as one of their various methods of payment.
Grayscale has also been steadily accumulating Litecoin since the inception of its Litecoin Trust on March 1, 2018. It currently holds 1.44 million Litecoins in its Trust, having just recently bought 178,691 LTCs just this week alone.
The writing is on the wall here. Litecoin is rapidly becoming an international currency for millions of people. Whether as a transfer of value, a medium of exchange, or as a storage of value, Litecoin seems to be on the verge of becoming a truly people's crypto coin.
Merge Mining: Supporting Dogecoin
Another interesting feature that Litecoin has is its ability to merge mine. What is that? It is:
Merge mining refers to the use of the work done for one blockchain (i.e., parent blockchain) on other smaller child blockchains, using Auxiliary Proof of Work (AuxPoW.)
It essentially involves mining for two or more cryptocurrencies simultaneously, without sacrificing mining performance.
In an effort to help a fellow crypto coin, Charlie Lee reached out to the creator of Dogecoin, Jackson Palmer, and proposed to merge mine the two crypto coins. Because of the nature of Dogecoin, mining it was becoming highly unprofitable and was at risk of experiencing a 51% attack. Thinking that merge mining was the only way to save it, an agreement was made, and in August 2014, the model was adopted, practically saving the lovable crypto meme from becoming a dead coin and allow it to eventually experience its massive price pump in January 2021.
The merge mine experience demonstrated to everyone just how adaptive Litecoin really is, which brings us onto our next point of our Litecon review.
Constantly Upgraded and Developed: Segregated Witness and the Lightening Network
Like most other cryptocurrencies, Litecoin is no stranger to having its network and code developed and upgraded. However, unlike Bitcoin and others, Litecoin has been surprisingly very receptive to any changes.
For example, when Segregated Witness (SegWit) was first proposed in 2015, there was skepticism (for technical and political reasons) within the Bitcoin community about implementing it. It was then decived to test it on the Litecoin network, which the community, after reaching a consensus, agreed. Led by Charlie Lee, the new technology was successfully implemented on May 10, 2017, the first to do so and with increased transaction speed and reduced transaction cost. After only two years, by 2019, it saw a massive all-time high adoption at 75%.
Bitcoin, meanwhile, implemented SegWit on August 7, 2017. It is now 2021, and the network has only adopted it by 50% when compared to Litecoin at 80%. This means that a large number of exchanges or wallets may not support the SegWit update for Bitcoin. So, any Bitcoin holder needs to track carefully where they can send their BTCs to. Litecoin, on the other hand, has less of that problem.
Another important aspect is the Lightning Network. Like SegWit, this upgrade is supposed to process transactions much faster via reduced information and outside of the blockchain. Once again, Litecoin beat the crypto King to the punch by becoming the first to implement it into its network, while the Bitcoin Lightning Network has grown faster than Litecoins'.
Then, we come across one of the most exciting and anxious upgrades Litecoin will soon have; Mimblewimble. Okay, what the heck is Mimblewimble? The name ‘Mimblewimble' comes from a Harry Potter magic spell phrase (All Harry Potter fans can rejoice!). Now, you might think that the person who created this feature was just a Harry Potter fan, and you would be partially right.
However, there is madness to this logic. It is a protocol that aims to opt-in a privacy feature for Litecoin. That means that users will have the option to send any transactions in private. This is ideal for those wanting to send a large amount of LTCs but are weary of it appearing on the Litecoin blockchain explorer.
By using the Mimblewimble privacy feature, with just one click, *poof!* a transaction is sent without anyone knowing who sent it or how much. See the analogy now?
For a more in-depth look at the dynamics of Mimblewimble, please click here.
Even when the protocol is complete, though, it will be up to the Litecoin community and miners for the launch date of the Mimblewimble protocol. Yet nevertheless, it is expected sometime this year for Mimblewimble to have its debut, making Litecoin, one of the top 10 cryptocurrencies, that much more appealing to potential users and investors. You would have a highly regarded and top crypto coin that is technologically more robust, faster, cheaper, and more fungible, with a built-in privacy feature to protect your funds and potential identity from unwanted eyes. There is great expectation that once this protocol is launched, Litecoin's popularity, and price, will soar as more people will flock to it.
However, it needs to be said that Litecoin is not a privacy coin. Unlike Monero and Grin, which are privacy coins by default, Litecoin is more like Zcash and Verge in that the user has the option to use its privacy feature. It is not mandatory.
Integration into the Flare Network for Smart Contract Interoperability
On January 8, 2021, an upcoming project called the Flare Network announced via a tweet that it would be integrating Litecoin into its network, essentially allowing users to use Litecoin on Ethereum style smart contracts. Additionly, it will also do an airdrop of its native token, Spark (FLR), to all Litecoin wallet addresses. No date has yet been announced.
When a person wants to use LTC on a smart contract, he/she would go over to the Flare protocol, use its native token FLR as collateral, and produce an F-asset, in this case, FLTC to be released on to the Flare Network. Once there, it is now fully compatible and interoperable with other blockchains, whether interoperable like Polkadot or Cosmos, or Ethereum, and can be used in smart contract transactions.
Litecoin was not the Flare Network's first pick, XRP was. However, considering that Litecoin is not native to smart contract transactions, and given its history of being technologically robust, it should come as no surprise that out of all other peer-to-peer crypto coins, Flare chose Litecoin as its second cryptocurrency to introduce smart contract capabilities.
Possible Velvet Fork with Cardano
Finally, we come across upcoming, yet not confirmed, news for Litecoin; a velvet fork with one of the new recent top 10 cryptocurrency blockchain platforms in the entire crypto market; Cardano! Yes, you read that right; there have been ongoing discussions since July of 2020 between the two crypto giants for a possible velvet fork partnership! Although nothing has been confirmed, the fact that the discussion is still ongoing suggests that progress has been made, and we could be in the final phase of negotiations.
Now, before everyone starts to celebrate and bring out the champagne, there are few things that need to be clarified. For starters, what is a velvet fork, and how does it work? Well, it is neither a hard fork nor a soft fork. Rather, it is a protocol upgrade on the cryptocurrency code. However, unlike other upgrades such as SegWit or Mimblewimble, a velvet fork does not require a consensus majority since it doesn't fundamentally change neither the code nor the network. According to the Litecoin Foundation Project Director David Schwartz, miners can still continue to perform their usual tasks with or without the upgrade.
With the velvet fork upgrade, it would be applied in conjunction with a Non-Interactive Proof-of-Work (NiPoPoW) algorithm because of its ability to verify transactions across different blockchain networks. By having the NiPoPow upgrade on Litecoin's blockchain, it will work as a side chain for Cardano, allowing it to verify transactions from the Litecoin sidechain.What this does is that, like with the Flare Network, it will further expose Litecoin to smart contract compatibility, even though it does very little interacting with it.
As the name implies, all NiPoPoW does is verify that a transaction took place without ever needing to connect to the blockchain or download all of its block headers. This may not sound like big news, but what this does is that it allows Litecoin to have some participation in the validation of smart contracts taking place in another blockchain.
What's more, if this is implemented and successful, it could entice Litecoin to establish another velvet fork partnership with another smart contract blockchain platform, such as Ethereum or Polkadot. What this creates is interoperability.
Litecoin could be a real possible connection between different and isolated blockchains. Furthermore, it can even be used as a springboard to allow smart contracts between these different blockchains to interact with each other. For example, a payment made on Ethereum could cause a payment to be released on Cardano or Ethereum Classic. Litecoin would act as the ‘middle blockchain' by verifying the payment made on Ethereum first, transferring that information to Cardano or Etherem Classic in order for the smart contract to release the funds from there. By installing NiPoPow on Litecoin, this could be possible.
Videos on how to use Litecoin and get most out of it
Below are a few videos about what Litecoin is and it's potential:
Alternatives to Litecoin
Considering that there are currently 8,677 cryptocurrencies in the market, it should come as no surprise that Litecoin does have a few competitors. We will not go over all of them; but here are a few of the more prominent ones.
First on the list is Nano. Billed as the ‘digital money of the world,' Nano is a peer-to-peer lightweight cryptocurrency that was launched back on March 6, 2017. It is designed to facilitate secure, practically instant payments without fees and addresses some of the major limitations of both legacy financial infrastructure and many modern cryptocurrencies. The project began back in 2014 under the name RaiBlocks and January of 2018, it rebranded itself to Nano to represent its speed and simplicity.
What makes crypto such a potentially fierce competitor is its speed. By speed, we refer to its ability to send a transaction in less than a second! How does it do this? By utilizing a directed acyclic graph (DAG).
Unlike a blockchain which usually groups transactions into a single linear file, the DAG allows nodes to ‘see' the big picture via its own ‘topological' ordering by having all of its nodes point in the same direction without causing any of them to loop. For security, they use ‘personal' blockchains via a wallet address to allow for rapid transactions to go through.
In addition, Nano does not charge transaction fees, making this crypto very ideal for sending small payments around the world.
It is currently one of the top 100 cryptocurrencies with a circulating supply of 133,248,290, which is also its maximum supply. Yes, all Nano tokens are now in circulation.
Second on our list is Electroneum. Ranked at #234, it is a mobile-based peer-to-peer cryptocurrency that seeks to connect the estimated millions of people who are still left out from the financial and banking systems. You could even say that it is a non-for-profit cryptocurrency as crypto is focused on helping those in the developing world. It does this by launching several platforms like AnyTask to help many people in developing economies become more globally integrated. Electroneum seeks to create a digital economy for millions of users.
What is unique is that it uses a Proof-of-Responsibility (PoR) algorithm. It recruited only 12 validators, usually non-profit organizations (NGOs), to verify transactions. In return for securing the network, these NGOs get paid in ETN, Electroneum's native token, which the organizations can use to fund their operations. It is a win-win situation for everyone. Electronuem's network is secured, and these NGOs receive a constant supply of monetary funds, disincentivizing them from pursuing a 51% attack. Should any of the validator nodes attempt to do it, its blockchain layers were built to respond to it by locating its source and shutting down the validator.
Its maximum supply is 21,000,000,000. This was intentional in order to keep the price of ETN low and somewhat stable in order to allow its millions of users to easily transfer funds around.
Zcash is another peer-to-peer competitor to Litecoin. Unlike those already mentioned, Zcash will be competing with Litecoin in the privacy and anonymity sector. As mentioned before, Zcash has built-in privacy feature options. When initiated, it leverages the technology of zero-knowledge succinct non-interactive arguments of knowledge, or zk-SNARKs, in order to enable completely anonymous transactions to be sent over a public immutable blockchain.
What also makes it a competitor is its relatively low supply of ZEC coins – it will only have 21 million. And just like Bitcoin, Zcash uses a proof-of-work SHA-256 hash function Whenever a new block is mined and added to the blockchain, a certain amount of coins is minted but then split between “miner subsidy” and “founders’ reward” at a ratio of 80 to 20 percent, respectively. In addition, Zcash also experiences a halving within certain intervals to slow down the issuance rate.
Litecoin Review – Conclusion
In conclusion, Litecoin has a lot to offer. It is one of the oldest and still thriving cryptocurrencies out there, and that says a lot. It means it has a lot of staying power, just like Bitcoin. Despite the creation of thousands of other coins and tokens as well as the infamous 2017-2018 bear market crash, Litecoin not only survived but thrived whilst other coins such as Peercoin disappeared into obscurity. It has remained in the top 10 since its birth, and there is a reason for that.
Litecoin is faster, cheaper, and more technologically robust than Bitcoin and other cryptos. Yes, it does face stiff competition from other crypto coins that offer greater features, but none of them are in the top 10, nor have they experienced such rapid institutional investment, upgrades, and integration with other blockchain platforms or projects.
It was the first to integrate the SegWit upgrade, the first to implement the Lightning Network into its chain; it is used as a method of payment in thousands of businesses worldwide, it is seeking interoperability with the likes of Cardno and the Flare Network. And now, it will soon be a competitor to the likes of other privacy coins such as Zcash, Monero, and Verge.
With all the attention and development going on, there are high expectations of its price going parabolic during this bull market. Yet, even if the price doesn't go up as high after everything it went through, one thing that is certain is that Litecoin is truly a digital silver to its digital gold counterpart.
- Ease of Use
- Transactions confirm much faster than Bitcoin and Ethereum.
- There are only 82 million Litetf coins in circulation.
- It is still affordable relative to Bitcoin's and Ethereum's
- Lower fees than other cryptocurrencies.
- Has a long-standing reputation in the crypto market top ten.
- Explosive returns are possible during uptrends.
- Major developments on its network are close to completion.
- Struggling to maintain in the top 10 in the face of rising fierce competition from utility tokens (E.g. Uniswap, Cardano, BNB, Polkadot).
- Most attention is being directed towards Bitcoin and Ethereum.
- There are other alternate, faster, peer-to-peer cryptocurrencies.