Unlike Bitcoin before it, Litecoin is an open-source, peer-to-peer digital cash network with a distributed cryptographic protocol and a native cryptocurrency. If Bitcoin is the digital gold counterpart, then digital silver would be Litecoin.
Litecoin is a Bitcoin Core client clone, which is why its software is very similar to that of Bitcoin. It was also one of Bitcoin’s first early spin-offs which helped spark the trend of producing thousands of additional altcoins flooding the market today.
Litecoin has been designed to address some of the shortcomings of Bitcoin, namely its speed. Litecoin offers lower block generation time, offering faster transaction confirmations — approximately every 2.5 minutes to the 10 minutes of Bitcoin.
Despite key differences, the two cryptocurrencies share a number of similarities and often, before being introduced to the Bitcoin community, Litecoin acts as a trial net for second-layer innovations such as Segregated Witness and the Lightning Network.
A Fast Start To This Bitcoin 2.0 Self-proclaimed
This was achieved very quickly as Litecoin was able to convince most consumers who decided to diversify their investments in cryptocurrencies by positioning themselves as the Bitcoin 2.0. Driven by Bitcoin’s euphoric rise at the end of 2017, with a market capitalization of over $19 billion, Litecoin hit its highest price at $358.
Like Bitcoin and other cryptocurrencies, on December 6, 2019, Litecoin experienced a sharp correction in 2018 but managed to remain in the top of the most capitalized cryptocurrencies with a capitalization of $2.8 billion.
Back on Earth, Litecoin no longer seeks to be viewed as a Bitcoin 2.0 but rather as a companion that in its future success can perfectly complement the Bitcoin.
Therefore, although Bitcoin is compared to digital gold by many, Litecoin would like to be considered digital silver. That correlation helps the developer of Litecoin to protect his project’s future as gold and silver have coexisted for a long time now.
The Technical Details of Litecoin
Litecoin’s code was identical to Bitcoin because it was a fork of the original Bitcoin Core Litecoin developer Charlie Lee introduced Litecoin in 2001 in an attempt to speed up cryptocurrency transaction times and fix certain issues he had about Bitcoin’s deficiencies. A block is processed every 2.5 minutes by Litecoin’s algorithm, while Bitcoin takes 10 minutes to process a block. Confirmation of the faster block results in faster transactions.
Instead of Bitcoin’s SHA 256, Litecoin also uses scrypt as its proof-of-work algorithm, making Litecoin more complex for me than Bitcoin. It is also said that Scrypt will create a faster and safer transaction, which will also reduce process fees.
Litecoin miners with 25 LTC earn each successfully verified block rewards. At regular intervals, the block bonus is halved until the last Litecoin is mined. The next halving of Litecoin is in August 2019, which has led to increased interest in Litecoin as supply miners would soon be declining.
About 62 million Litecoin’s are currently in circulation, with a peak supply of 84 million LTC compared to 21 million Bitcoin’s. Litecoin is divisible by one, one millionth, or down to 8 decimal places with 0.00000001 called a photon being the lowest unit of measurement.
Litecoin needs to be seen as a testing ground for bitcoin
Litecoin aims to test first-hand all the innovations that the Bitcoin community is debating to boost its scalability in its quest to be viewed as a companion of the Bitcoin for the future.
Litecoin was the first cryptocurrency in the Top 5 to adopt Segregated Witness (SegWit) which is a format change in Bitcoin Blockchain transactions.
Also motivated by this urge to be a platform for Bitcoin’s innovation, in May 2017 Litecoin started implementing the Lightning Network on its Blockchain.
Litecoin Wants To Be Digital Silver
While it portrayed itself in its early years as a Bitcoin without its faults, a kind of Bitcoin 2.0, since then the Litecoin project has revised its aims downwards as I have just explained.
Litecoin needs to be seen as digital money from now on.
Because Bitcoin is often viewed as digital gold due to its technological features and the fact that it has proven to be a real value store for several years now, Litecoin sees a viewpoint as digital silver for its future.
The rationale of Charlie Lee is as follows: Bitcoin is a store of value more than an exchange mechanism due to excessive transaction fees when the number of users on its network becomes too large.
Charlie Lee is taking the example of what happened at the end of 2017 when a horrible bottleneck in the Bitcoin network was triggered by market euphoria.
Transaction fees had soared literally, just as it took the time to validate transactions.
Since Bitcoin is primarily a value store for Chalie Lee, a kind of virtual silver will be needed in the future for a cryptocurrency for daily transactions. For Charlie Lee, with its slightly different technical features than Bitcoin, Litecoin specifically serves this need.
In addition, on the Litecoin Blockchain, transaction times are much faster, which should allow for better scalability.
Why Litecoin Might Eventually Fail As The Digital Silver To Bitcoin’s Gold
Litecoin Rode on the Back of Bitcoin’s Rally
At the right time, Litecoin caught the price momentum and rode alongside the fame of Bitcoin for a long time, Saurel commented. Charlie Lee, LTC creator, used the primary Bitcoin code with a few LTC tweaks with a promise of a faster and cheaper network.
But just as in December 2017 the crypto reached its peak, Lee sold all of his shares–just above $350 at the highest point of the coin’s value. This decision caused the community to rumble, costing some of Lee’s reputation.
I would rather send 1 ETH to VitalikButterin or CharleyLee hoping to get 5 ETH back than I would want to participate in the HEX scam.
— Jacob Canfield (@JacobCanfield) December 6, 2019
The other reason Litecoin is obsolete is because Bitcoin doesn’t need a secondary component, or “silver.” As a stand-alone currency, BTC is both a value store and an effective network for relatively rapid transactions. Bitcoin makes economic value transactions through temporary congestion, and LTC is only slightly faster.
LTC Prices Go through Spikes and Crashes
LTC’s action was seen as potentially unstable, as the coin fell from a high to a low of $22 in late 2018. The asset had recovered to the 2017 pre-boom rates within a year. Earlier, Litecoin soared again beyond $140 to hit $45.67 in December 2019 before unraveling again.
Due to halving the block bonus, LTC saw a major hype in 2019. But the price was high
Saurel argues that there is no need for Litecoin to diversify portfolios of crypto investors. He expects increased interest in BTC investment in 2020, but without a companion coin being needed. Also, after several cycles of spiking and crashing, LTC does not have the same price growth potential. To date, Litecoin has failed to meet the expectation of rising to four-digit prices, meriting being placed in the same group as Bitcoin.
Litecoin Has A Leader Unlike Bitcoin
Litecoin is a leader in Charlie Lee’s life. Nonetheless, Bitcoin’s great strength is that it doesn’t have a boss. Bitcoin is everybody’s own, not Litecoin.
Why is Litecoin having a leader problem?
Very simply because this mode of operation reproduces only the shortcomings of the current monetary system, which is in the hands of a few abussing their control.
Therefore, Charliee Lee did not hesitate to sell the majority of the LTC that he owned at the same time as their price reached an all-time high at the end of 2017, posting a performance of more than 7,000 percent in 2017.
The reason given was to prevent any interest conflict. This decision has been more than questionable for many. I’m now leaving you judges.
Litecoin is no more than a Bitcoin clone
Litecoin is nothing more than a small copy of Bitcoin. Because Litecoin’s source code is almost similar to Bitcoin’s, the Blockchain’s vulnerabilities are essentially the same.
Investors are not interested in buying Litecoins with the same chance of protection as their Bitcoins.
Charlie Lee continues to repeat himself that it could be devastating for Litecoin and its $2.8 billion capitalization if a major security breach was found on the Bitcoin.
As an investor, you are not even interested in diversifying your investment with Litecoin in cryptocurrencies as it represents the same risks as Bitcoin without the benefit of having the same price growth prospects.
Bitcoin does not need a partner to play the role of Digital Silver
Bitcoin is a phenomenal success already. It has shown that in the same way as a digital gold, it can play the role of a store of value. It is obviously not to be believed that Bitcoin is out of the game as far as daily transactions are concerned.
Bitcoin’s adoption as a means of payment by merchants continues to grow.
In many big developed countries, things are going to change for 2020. Obviously, the Bitcoin does not need a companion to play virtual silver’s role.
It can itself be used in the future as a regular means of payment, and Bitcoin continues to build the future financial system. Bitcoiners are likely to be able to implement solutions that will allow Bitcoin to achieve mass