Litecoin is fondly referred to as being the digital silver while bitcoin was crowned as digital gold. It seemed to live up to its name and has consistently played second fiddle to bitcoin and in recent years may be slowly ebbing away into obscurity given the lack of any major technological advancements. The Network that once occupied a comfortable place among the top 5 cryptocurrencies now ranks as the 15th largest cryptocurrency behind Bitcoin Cash and below Chainlink.
As the network nears its tenth anniversary, there seems to be a resurgence following a wave of increased adoption. Businesses are turning to Litecoin for their payment needs while institutions are also adopting Litecoin to give a holistic cryptocurrency experience to their client base.
It seems as though that the community is finally perceiving the value of the simplistic approach that it offers which most likely played a role in shattering its previous record high to reach an impressive $412.96.
Although the asset is trading at $177.09 at the moment, there’s always a silver lining in every dark cloud as the asset claw its way back to the top. In a few months, the Network will mark a decade of operations and the community has every reason to be ecstatic because it is still a major player in the game.
What Is Litecoin?
Litecoin is a proof-of-work cryptocurrency that was designed as an alternative to Bitcoin, offering a peer-to-peer means of carrying out transactions without the need for an intermediary. Essentially, Litecoin is a fork of Bitcoin and has certain features that distinguish it from its progenitor.
Technically, Litecoin uses a cryptographic algorithm known as Scrypt while Bitcoin makes use of the SHA-256 algorithm. Through Scrypt, Litecoin is one of the most secure blockchains in the ecosystem. Litecoin was built on the foundation of speed and as such, it processes each block in 2.5 minutes making it faster and easier to carry out everyday transactions with it. Transaction fees are kept at an absolute minimum which makes it practical for real-world utility.
Litecoin was launched by Charlie Lee on 7 October 2011 who has described it as being the lite version of bitcoin given the similarities that they have. A few years after its launch, Litecoin was described as the digital silver while Bitcoin was called the digital gold.
In terms of tokenomics, Litecoin has a circulating supply of 66,752,615 LTC and a max supply of 84,000,000 LTC. There is a block reward of 12.5 LTC which is halved every four years with the next halving scheduled to take place in August 2023.
The Decline of Litecoin
After Litecoin launched in 2011, it gave bitcoin a run for its money as a result of the improvements that it offered users. The two digital currencies went head to head as adoption rates soared leading to a rise in prices.
Bitcoin had the first-mover advantage which put it at the top of the leaderboard while Litecoin had to settle for the second fiddle as cryptocurrencies slowly became mainstream.
In 2015, Ethereum was launched and it pushed the frontiers of cryptocurrencies to a whole new level. All of a sudden, cryptocurrencies weren’t limited to just making transactions but had lots of functionalities embedded in them. Following the success of the Ethereum experiment, new blockchains were created that offered greater speeds that could be deployed in a wide range of sectors.
Blockchains like Cardano, Polkadot, Binance Coin, Solana, and Chainlink knocked Litecoin down from the top 5 positions that it previously occupied to the 15th position. Its sister network, Bitcoin comfortably retained its top spot thanks to the first-mover advantage that it had despite its obvious limitations.
Another reason for Litecoin’s dwindling fortune is the lack of technological advancement for the project over the years. While other blockchains got faster and expanded their functionalities, Litecoin practically remained the same which saw the asset unable to exceed the all-time high set in 2017 until nearly four years later.
Recall that Charlie Lee, the founder of the network commented on the developmental status of the project back in 2019 saying that “no one is interested in working on Litecoin”. He added that no one that is “technically competent” is working on it and it is not a financial issue.
The absence of developers tweaking and improving the network led to the gradual decline of the once-dominant Litecoin. In the face of the downtrend, Mike Novogratz referred to Litecoin as a “glorified Bitcoin testnet” while Charlie Lee sold all his LTC holding, raising doubts about the future of the cryptocurrency.
The Current State of Litecoin
Recent happenings around Litecoin points to the fact that the network may have begun to rediscover its form once again. During the doldrums that characterized its fall from the top of the rankings, adoption rates for the asset continued to rise. Businesses around the world are turning to Litecoin to solve their payment challenges and right now there are over 2000 online merchants that accept Litecoin as a means of payment.
Litecoin’s simplicity in sticking to the basics of being a medium of carrying out digital transactions has been recognized by the cryptocurrency community and is the bastion of resurgence. The asset is not clogged by fancy utilities or security challenges and prides itself on having a 100% uptime since 2011. Its simplicity, speed, and ease are finally beginning to set it apart from its contemporaries.
Top brands are increasingly embracing Litecoin with payment giants, PayPal leading the charge in 2021. Through the use of PayPal’s digital wallets, users can now buy, hold or sell Litecoin.
Similarly, Venmo has also announced that users can also purchase and sell Litecoin on the platform, bringing the asset into the purview of Venmo’s over 52 million users. Only last month, BitPay announced the support for Litecoin on the BitPay wallet app ahead of higher ranking currencies like ADA.
In terms of technical advancements, Litecoin is gearing up for the launch of MimbleWimble, a major upgrade that will introduce improved fungibility, privacy, and scalability. The testnet was launched in October 2020 and is currently undergoing intense scrutiny by the development team.
The development of the Lightning Network for Litecoin was a stroke of good fortune for Litecoin although there were fears that Bitcoin would leverage it to increase its share of the market.
However, both Bitcoin and Litecoin have flourished through the use of the Lightning Network. Litecoin’s founder, Charlie Lee argues that the use of the Lightning Network will only improve the utility of the network and that it will always remain faster and cheaper than Bitcoin.
The resurgence of the project has come with a slew of benefits for the asset. After more than 3 years, the asset went on to shatter its previous all-time high that was set in 2017.
The new all-time high was a staggering $412.96 that was set on the 10th of May, 2021. The spike in price led to a significant increase in the market capitalization of the asset as the community quickly forgot that it had a 52 week low of $42.54.
At the moment, Litecoin is following the general uptrend of the market and has recorded an impressive 10.21% in the last 24 hours which puts it as one of the highest gainers of assets in the top 20 largest cryptocurrencies.
The general uptrend spans over the last 7 days resulting in a gain of 21.38% which gives it a market capitalization of $11.72 billion and should this uptrend continue a little longer, Litecoin can leapfrog Bitcoin Cash and Chainlink to occupy 12th place.
Litecoin currently trades at $177.09 and has a market dominance of 0.61. Daily trading volume is at $2.5 billion, a figure that represents a 5.49% growth over the last day. There is a strong belief that the stars are beginning to align for Litecoin and prices can go as high as the levels reached in May.
At its height, Litecoin was the darling of the cryptocurrency community given the improvements that it offered over Bitcoin. The value of the asset rose sharply with adoption rates thanks to the speed and ease of transacting that it offered its users. However, Litecoin’s fabric began to tear at the seam because of the launch of newer blockchains that offered myriad utilities.
The current state of Litecoin is filled with a lot of optimism as the Network makes a resurgence despite the rocky couple of years that it had endured. Having shattered its previous all-time high in over 4 years, it seems the community is now convinced that the simplicity of Litecoin may not be a bad thing after all.
Technological updates are underway while institutional adoption rates are equally soaring. In October, the network will mark its 10th anniversary and there is genuine cause to celebrate because through thick and thin, it remains relevant in the grand scheme of things.