9
Jun

Litecoin – Is LTC the future of Bitcoin?

 

It’s not a news that, actually, Bitcoin network is offering a bad (really bad) user experience. Transactions cost more than several banks and take ages to be confirmed. Sure, you can pay 10-15$ of fees and see your transaction be confirmed in few minutes, but is it normal? Obviously no.

During the last 12 months, the problem of Bitcoin scalability was the main problem discussed in BTC communities. Obviously, this is just “gossip”: only two subjects really choose what will be of Bitcoin: the Core Dev Team and the Chinese Miners.

We already talked about Core Team, and we don’t want to waste your (and our) time to talk again about them. For who wake up just now after 12 months of lethargy, Core Team is a gang of Blockstream “employees”, who claim to be independent developers, but instead, the only things that they do are to try to move some part of the bitcoin transactions volume to their business (cought-segwit-cought), saying that segwit will fix the scalability problem of bitcoin forever. It’s useless to say that SegWit if it will ever be implemented, will need at least 6 months to start working properly (SegWit works ONLY for nodes who accept it).

 

These factors (slow and expensive transactions) could be the biggest present by Bitcoin to other altcoins (Ethereum first). Anyway, we believe that the main subject who can benefit from this could be the small (and often ignored) little brother of Bitcoin: Litecoin.

Litecoin was released in 2011 by Charles Lee, as an open source decentralized software. Litecoin could seem a Bitcoin clone, but it has some structural difference:

  1. Transactions are processed faster than Bitcoin, because blocks are generated every 2.5 minutes (every 10 minutes for Bitcoin Network).
  2. Litecoin uses scrypt in its proof of woork system, so different from the 256-bit hash of Bitcoin (but normal user don’t have to care about it, it’s only about mining).
  3. The Litecoin Network will produce 84 million of Litecoins (4 times Bitcoin).
  4. SegWit is ALREADY ACTIVE on Litecoin network.

These are all good aspects, but to understand how could grow Litecoin we have to take a look closer. Litecoin, except for the differences previously described, is a “clone of Bitcoin”. What does it mean? It means that, with some little changes, every service developed for Bitcoin could easily work for Litecoin too. This means that the GIANT ecosystem of Bitcoin (actually, IMHO is the only good reason for its value) can easily be modified to work for Litecoin too. For example, some good service developed for Bitcoin accept already Litecoin. This means that Litecoin could easily be a substitute of Bitcoin when you don’t need a value reserve but a fast, cheap and safe way to move money. Think that, for example, Kraken (one of the biggest exchange) had to set the withdrawal fee to 0.001BTC (more or less 2.85$), Litecoin’s fee instead is 0.02LTC (0.6$). We can assure you that, with this fee, if you withdraw BTC you could wait from 3 to 12 hrs before its confirmation. With Litecoin you could have it confirmed in less than 20 minutes.

But, what let us think that Litecoin’ price could increase exponentially during next months? Simply, the daily transactions.

litecoin daily transactions

 

Like you can see in this chart, after AGES of 3-5k transactions per day, the number constantly increase (now it’s on an average of 10-15k per day). What does it mean? It means that people are tired of pay for slow transactions, and they started to looking around. Ethereum and other cryptocurrencies are fast and safe alternatives to move your money, but their ecosystem is still under construction: the risk is that you can easily move tons of funds using XRP but you don’t know how to change them in FIAT currency. With Litecoin this problem doesn’t exist since the ecosystem was already developed. We believe that, if developers continue working on LTC, the adoption will definitely explode.

 

Another aspect is that Litecoin has no governance trouble: if a change is needed, it is done (see SegWit: in Bitcoin, developers are talking about it from last year, in Litecoin it was implemented without any drama).

 

That’s all for today, we’ll come back talking about LTC during next days, trying to explain how SegWit works and what it takes to Litecoin Network. Stay tuned, we are sure that it has several surprises.

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