At the time of press, Litecoin (LTC) is trading at $78 and up 2.8 percent from yesterday’s close. But it has not always been like this. The sixth most valuable coin did plunge after last year’s frigid crypto winter hitting $22, a level Charlie Lee predicted when he liquidated his stash at the height of 2017 rally. Although he made a good call by “exiting”, cashing out and untangling himself in what he said was to avoid a “conflict of interest”, Litecoin is soldiering on. In its ups and downs, the coin is resilient, and developers sticking to its road map. At the core is the objective of Litecoin to be faster, secure and to complement Bitcoin—where analysts now say BTC is a store of value—as a transactional currency, that is, a medium of exchange.
Reason Behind Litecoin Rise
And they have been pretty successful. Not only is its demand high and hash rate at record highs as miners re-invest, channeling their hard-earned monies into gear as they seek to mine the next block and turn in $1950 for every block mined. But, at the back of this increased interest, here’s what pumping Litecoin:
Lindy’s Effect: According to Wikipedia, the Lindy’s effect is “a theory that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy”. At 8 years, Litecoin as well as Bitcoin are toddlers in this space. As they compete with legacy systems in Visa or MasterCard for example, they strive to be decentralized and global with unparalleled reliability thanks to its distribution. Lindy’s Effect applies to both Litecoin (LTC) and Bitcoin (BTC). They are battle-tested withstanding the attrition of time and regulation. It’s only a matter of time before Litecoin becomes a preferred medium of exchange where transaction can be done anywhere in the globe without the inconveniences of FX or exorbitant charges of middle men.
Atomic Swaps, Lightning Network and Bitcoin Compatibility: Lightning Network (LN) is a solution that would scale the Bitcoin network. Behind its development is Lightning Labs and Elizabeth Stark defining the layer-2 solution as a “decentralized network using smart contract functionality in the blockchain to enable instant payments across a network of participants.” LN is fast allowing for instant payments without worries of block confirmation times, smart contract based with the underlying mainchain as an arbiter, low cost and with atomic swaps or cross chain capabilities. Therefore, with this, it is possible for one to swap BTC to LTC without a third party as the two are compatible. Naturally, this arrangement means your BTC will be your savings account while Litecoin is your spending account as possible within a platform that is fast and scalable with low fees.
To cap it Up
When we add this to scarcity expected after August 2019 halving, the coin’s demand will no doubt spike. Even so, anchoring Litecoin’s parabolic rise is demand, platform development and above all, participation.