Always the little sibling, the silver to Bitcoin’s gold… Litecoin was conceived in 2011 as a solution to some of the liquidity and speed problems that Bitcoin was encountering. With a block time of 2.5 minutes compared to 10 whilst maintaining the block size of 1MB, Litecoin has always been able to confirm nearly four times as many transactions as Bitcoin, and it also has 4 times as many coins available.
It might not have received the attention of Ethereum as even more of a newcomer, but I wonder whether that story would have played out in the same way if it weren’t for the explosion of ICO activities in the past year or so, demanding a plethora of ERC20 tokens. Had crowdfunding taken a different route culturally, could things have been different for Litecoin? We’ll never know. Certainly its nimbleness should have enabled a higher profile than that of the two big heavyweights, such as the ability to pioneer SegWit functionality and the lightning network. However perhaps by staying out of the limelight there have been other advantages, such as avoiding high-profile forks and other controversies.
And whilst remaining in the shadow of its “big bro” Bitcoin, Litecoin has been a consistent 10 ten performer, and was one of the first 3 to be listed on Coinbase for direct purchase. Of course it’s a given that it will be part of the launch offering on LocalCoinSwap this summer, but what else does Litecoin’s future hold?
Its creator, former googler Charlie Lee, famously sold most of his position during the boom of December 2017, stating at the time “Litecoin is more centralized because I’m around, so it has a more centralized development team, has more centralized foundation. I can steer litecoins towards my vision, and people will listen to me because I created it.”, suggesting that he still saw it as very much his project under his control, regardless of his personal investment. However this week in an interview with TenX, Lee appeared to contradict that position and suggested: “For a currency to really be … a worldwide decentralized currency, you can't have ... a real leader who's trying to control things, so to make it more decentralized, eventually I would step away.”
Whatever his feelings regarding centralization, Lee has been consistent about his commitment to the coin, and his intention to keep working on it. And perhaps the one thing that no other crypto can ever catch up to Bitcoin with is the fundamental origin story, of the mysterious anonymous creator. In that sense, maybe a degree of focusing around a founding figure is inevitable, and need not be an obstacle to a cryptocurrency continuing to develop in a distributed and inclusive way.
Wider use is clearly one of the biggest drivers of cryptocurrency development, and a good example of how a rising tide floats every coin - the more new people who can be encouraged to engage with any crypto, increases the overall market cap and cultural acceptance. So it’s good news that Alza, a large Czech-based online retailer, recently announced that they were now able to accept payment for goods and shipping in Litecoin across a range of markets - they sell a wide range of goods in addition to crypto-related hardware like the Trezor wallet, and also take Bitcoin, with plans to add Dash later in the year.
And the online payment card Wirex also recently announced that it was integrating Litecoin into its existing suite of currency options, facilitating inter-crypto exchanges as well as general shopping and spending. Moves like this help shift crypto-use out of the purely online space, pushing real consumer usage right out into the high street.
But perhaps the biggest piece of news that caught our eye about Litecoin recently was when Business Insider revealed the existence of a transaction spotted on its blockchain - worth $99 million.
The sending and receiving parties to this deal are unknown, but it took 2 and a half minutes to process, and cost just 40c.
I guess it was probably quite a long 2 and a half minutes to those awaiting the confirmation, but how much would it cost to make a transaction of that size in any fiat marketplace? It would doubtless involve teams of legal advisors and complex contracts, along with brokerage and custody fees, and that’s before we wonder whether the deal was done across different countries or jurisdictions, if perhaps someone wanted to buy themselves an island somewhere sunny...
And how long would the transaction itself have taken? Days, or weeks…? Certainly not 2 and a half minutes. OK, you’d probably want to wait for a few more confirmations than that, if it was your hundred mill hang on the deal… A deal that so captured the imaginations of everyone who saw it on the blockchain, that it appreciated in value by another 6 million over the following 24 hours, such was its impact on the market price.
So of course a lot of people are going to chime in at this point about how Stellar or XRP would have been seconds rather than minutes and cost even less, but the point is that transactions of this scale are qualitatively different, going way beyond proof of concept. Whether it was an exchange consolidating wallets, a yet-to-be announced institutional investment, or a private whale discreetly acquiring a city or an airline, we’ll probably never know - but it would be unlikely to have happened at all on a blockchain that wasn’t thoroughly established, tested and trusted.
And the fact that they chose Litecoin, over Bitcoin or Ethereum, has definitely put the spotlight back on Charlie Lee’s baby. Litecoin is growing up and graduating, and it will be great to see how it performs on LocalCoinSwap following our ICO.