Briefly
- Litecoin marks its tenth anniversary in 2021.
- Charlie Lee instructed us why LTC has spent almost 10 years as a top-ranking cryptocurrency.
- In 2017, Litecoin spotlit the problem of what occurs to a serious crypto when a founder cashes out.
It’s a giant yr for Bitcoin spin-off Litecoin. The cryptocurrency—usually described because the silver to Bitcoin’s gold—celebrates its tenth anniversary in October.
Not too long ago, Decrypt sat down with Litecoin’s founder Charlie Lee, an MIT graduate and Google veteran, to search out out simply what’s so nice concerning the cryptocurrency he designed. We’ve boiled his solutions down into good helpful info.
In 9 years, Litecoin had zero downtime
Bitcoin and Ethereum, the highest two rating cryptocurrencies by market cap, have each skilled downtime—however not Litecoin, in accordance with Lee.
“Litecoin has been operating nonstop for nearly 10 years,” Lee instructed Decrypt. “It is one of many few cash that may declare that. Even Bitcoin has had points the place there’s been like a fork and a specific amount of downtime. Litecoin has not had any downtime since I launched it in October of 2011.”
It’s been a top-10-ranking cryptocurrency ever because it was invented
It might have gone up and down in rank, however Litecoin has been within the top 10 cryptocurrencies by market cap for just about the entire time because it launched. It’s at present at quantity eight, between Chainlink and Bitcoin Cash. However Decentralized Finance (DeFi) cash, akin to Wrapped Bitcoin (WBTC) and Uniswap’s governance token UNI, are rising quick.
“There’s loads of cash which have had their quarter-hour of fame however receded,” mentioned Lee.”Litecoin has by no means actually left the highlight; it is fairly spectacular.”
Litecoin’s mining algorithm provides it a safety benefit
Litecoin makes use of a distinct mining algorithm to Bitcoin. Because of this it might probably dominate the so-called “hashrate” of the algorithm it makes use of, which known as Scrypt.
That’s not an possibility accessible to Bitcoin Money, for instance; like Bitcoin, it makes use of the SHA-256 algorithm, however solely has round 2% dominance, making it susceptible to assault. In distinction, LTC’s Scrypt dominance is at round 99%, mentioned Lee.
“There is no incentive for Litecoin miners to assault Litecoin as a result of they’re mainly attacking their very own, whereas for SHA-256 miners, in the event that they assault Bitcoin Money and Bitcoin Money dies due to it, they don’t actually lose a lot cash in any respect, as a result of they’ll return [to mining Bitcoin],” he defined.
Litecoin has excessive liquidity
Litecoin is listed on each main cryptocurrency alternate. Like Bitcoin, it’s used as a retailer of worth, however its super-low charges and quicker transaction price have boosted its recognition as technique of alternate.
“At this time, the market cap is $9 billion, however the quantity is $8.5 million {dollars}. The buying and selling quantity exceeding the market cap is fairly spectacular, so it’s extremely liquid,” mentioned Lee.
It has extra ATM assist than any crypto, besides Bitcoin
The newest information from CoinATM Radar places the variety of ATMs supporting Litecoin at 9,425, whereas virtually 15,000 ATMs now provide Bitcoin. Studies final yr prompt that LTC was set to be enabled in 13,000 ATMs in Korea, which might imply it has extra assist worldwide than even Bitcoin.
“There are loads of locations the place you should buy and promote Litecoin, it’s the second-best supported [cryptocurrency,]” mentioned Lee.
Litecoin is supported by PayPal
In October 2020, PayPal introduced support for Bitcoin, Ethereum, Bitcoin Money, and Litecoin, which signifies that its 350 million US clients can now purchase and pay for items and companies in these cryptocurrencies.
“Individuals selected to assist Litecoin as a result of it is a helpful foreign money and it is one of many high currencies,” mentioned Lee.
After all, not everybody within the crypto neighborhood is head-over-heels in love with PayPal. It is are available in for criticism over its phrases and circumstances, which state that the crypto in your account “cannot be transferred to different accounts on or off PayPal.” Nonetheless, although, it is opened the doorways for some 26 million merchants to just accept funds in cryptocurrency—together with Litecoin.
Privateness options are coming to Litecoin
Litecoin is getting a serious improve over the approaching months to offer it so-called “fungibility,” the place one coin is indistinguishable from one other.
“That is what makes cash highly effective as a result of each coin or any invoice is similar—it is fungible. At the moment, that is not the case with Litecoin and Bitcoin,” mentioned Lee. “There are tales you hear that individuals deposit some cash to Coinbase and their account will get banned, as a result of the cash are linked to a darkish market, for instance,” he defined.
MWEB, the opt-in privateness and fungibility function being launched, means the cash can’t be ‘tainted’ by what they’ve been used for up to now. It’s an optionally available function and capabilities as a sort of sidechain. Lee believes it’s going to be a serious promoting level.
Nearly 2% of LTC is locked up within the Grayscale Litecoin Belief
Digital asset supervisor Grayscale Funding made headlines when it introduced a report $27.1 billion in property beneath administration final week. It’s one of many few methods institutional traders can get publicity to Bitcoin with out having to carry the asset itself.
The Grayscale Bitcoin Trust has pulled within the bulk of the funds—and generated nearly all of the headlines—however the asset supervisor additionally operates trusts for a small variety of different cryptocurrencies, together with Litecoin.
“The Grayscale Litecoin Belief is doing very well,” mentioned Lee, stating that $173 million LTC is at present locked in it—which represents virtually 2% of all Litecoin in existence. “It’s exhausting to know what a posh demand there’s on the institutional aspect for Litecoin, however this, it’s fairly spectacular.”
9. Litecoin survived after Lee cashed out
Litecoin was maybe the primary main cryptocurrency to lift the thorny challenge of what occurs when a founder cashes out.
Lee sold his LTC on the finish of 2017, close to the height of the cryptocurrency increase, citing battle of curiosity and different causes. He mentioned that—even three years later—individuals nonetheless hate on him for promoting out, and a few even blame him for crashing the entire crypto market, which is “ridiculous,” he insists.
“It is sort of human nature for that to occur; I ought to have anticipated it,” he mentioned ruefully. “Lots of people suppose I give up Litecoin as a result of I’ve no incentives to work on anymore. But it surely’s sort of the other as a result of it is my child, so to talk. It is my legacy.”
