Every time someone or something succeeds, there are others to follow. Whether he should build on their legacy or simply try to steal a piece of the pie, only time will tell. Bitcoin is called the gold of the internet, Litecoin aims to be the silver to stand tall next to Bitcoin. How has the coin fared and what does the future hold for this Bitcoin sibling?
Litecoin is the second altcoin to release, the first Namecoin has mostly been lost to history, stuck at under 700 marketcap rank. Both Litecoin and Namecoin were heavily forked from Bitcoin's code, Litecoin made some changes to distinguish itself from Bitcoin. Founder Charlie Lee, who is a former Google employee, changed the cap on the total coin supply, as well as reduced the fees that users pay, the smaller size and the changed hash algorithm also allows for faster transactions.
The coin is often compared to Bitcoin and is undervalued because of it. It is able to outperform most altcoins because it has made changes to Bitcoin and offers a straightforward use case and solution. They do not intercept or give revenue to the development team, they accept donations. However, Charlie Lee left development, leaving the coin effectively captainless and unable to respond to relevant changes.
The coin is fundamentally the same as Bitcoin, yet it is a hard fork. There are three main changes that make this coin different. The total coin supply increased from 21 million to 84 million, lowering the price per coin to something that would be more user-friendly (there are many people who think you should buy a whole coin). The hashing algorithm is not SHA-256, instead it uses SCRYPT which is less energy intensive, DOGEcoin also uses SCRYPT and can be double mined with Litecoin. This algorithm is more CPU and GPU friendly, but is weaker, leaving the coin more susceptible to 51% attacks. Finally, the blockchain is built with a feature called mimblewimble, which makes only part of the transaction data visible on the public blockchain, meaning greater privacy.
The coin is designed to either make payments or store value within it – digital silver if you will. It fulfills this use case better than Bitcoin in most cases, as the coin has faster transactions, thanks in part to the SCRYPT hashing algorithm, but also to its smaller market cap. Fewer users create less load on the network after all. It also works as a self-funding mechanism, rewarding Litecoin miners for securing the network.
Litecoin is slowly but surely losing steam. This is mainly due to the rise of more altcoins that are stronger. The coin will also most likely not see any new features since the founder has left the coin. It currently remains safe from its two main threats: Bitcoin upgrading its blocks and Bitcoin Cash gaining momentum (this sees the more likely Litecoin killer). It is still swinging and offers investors a chance to make money, but how long it will stay remains to be seen.
- Faster transactions than Bitcoin
- Can be double mined with DOGEcoin
- Easier for me
- It will face the same scalability issues as Bitcoin
- Still in the shadow of Bitcoin
- Easier to attack