Litecoin Update: What’s Going on With This OG Crypto?
Founded in 2011, Litecoin is one of the oldest cryptocurrencies, and used to be widely known as “the silver to Bitcoin’s gold.” These days, even though it is still a top 25 cryptocurrency by market capitalization, nobody seems to be talking about it, even though there have been impressive upgrades over the past several years. Let’s briefly introduce Litecoin, its recent privacy upgrades and future plans, and whether or not it deserves more attention.
Litecoin was founded in 2011 by Charlie Lee, the third employee at Coinbase. Lee cloned the Bitcoin codebase and modified it in a few key ways, namely increasing the supply 4 times to 84 million and decreasing block times to 2.5 minutes instead of 10 minutes. He also modified the mining algorithm from SHA-256 to Scrypt, which was done to ensure that Litecoin was not directly competing with Bitcoin for network security. Interestingly enough, Litecoin is merge mined with Dogecoin, meaning miners can receive both simultaneously.
Litecoin initially became popular because it was a faster and cheaper version of Bitcoin, and thus was more usable as a digital cash. With its status as one of the original cryptocurrencies firmly cemented, it has also been consistently listed first whenever a new exchange or fintech company starts offering crypto services. Moreover, given that there was no pre-mine and the network is very decentralized, it is likely safe from any regulatory scrutiny, giving institutions more comfort when dealing with it than other altcoins. For example, Venmo and PayPal offer Litecoin as one of four offerings. With the Bitcoin ETF approved and Ethereum the likely next choice, Litecoin is primed to be in discussions for the third cryptocurrency to have an ETF.
Litecoin has previously been a canary network for Bitcoin and implements new features before Bitcoin to ensure that everything works as intended. For example, the Lightning Network came to Litecoin first and was only later added to Bitcoin. In 2022, Litecoin introduced MimbleWimble privacy features to the blockchain, allowing for privacy-optional transactions that ensure regulatory compliance while allowing users to anonymize their transaction amount and destination.
The last time Litecoin received lots of public attention was in the pre-ICO era, before Ethereum, smart contracts, and DeFi became hot topics in the cryptocurrency space. Since around 2017, Litecoin has continued running, providing users with a fast and cheap transaction experience. It is one of the only chains that can boast 100% uptime. Even though it is not getting the attention it once was, it is currently the most used asset on BitPay, one of the largest crypto payment processing services.
The most recent trend on Litecoin has been the introduction and proliferation of Ordinals. This movement, which began on Bitcoin and has now spread to many chains under the generalized term “inscriptions,” involves individually numbering small fractions of Litecoins, writing data, and using them as non-fungible tokens. To date, over 20 million inscriptions have been created, albeit the majority being simple text or spam.
With the recent buzz about smart contracts and ZK rollups potentially coming to Bitcoin, Litecoin is likely also considering implementing these features. If the smart contracts on Bitcoin movement seems inevitable, it would not be surprising to see Litecoin do it first and continue its role as Bitcoin’s canary network. This would be a win-win for both Bitcoin and Litecoin, as Bitcoin could ensure the technical stability of the code before implementing it. At the same time, Litecoin could benefit from a massive technological upgrade.
Given all of this information, is Litecoin worth more attention? There is no right answer. On one hand, as an original cryptocurrency still used to this day, it clearly has a lot of staying power. It has proven the importance of safety, security, and regulatory compliance. On the other, its barebones set of features compared to smart contract blockchains and lack of use outside of payment and store of value, both things that Bitcoin can do to the same degree or better, make it to some a clear second choice to this digital gold. Whether or not Litecoin remains relevant remains to be seen, but one thing is certain: Litecoin clearly has a use case whether people are talking about it or not, and it will likely not be leaving the top 50 anytime soon.
By Lincoln Murr
