Litecoin was created by Charlie Lee, an MIT graduate and former Google engineer, in 2011. It is based on an open source global payment network that is not controlled by any central authority and uses “scrypt” as a proof of work, which can be decoded with the help of CPUs of consumer grade.
Litecoin, the fifth largest cryptocurrency which is often dubbed as “silver to Bitcoin’s gold,” recently crossed the crucial $60 mark for the first time. Its price has surged 1300% this year. Its price has had a dramatic innings like most cryptocurrencies. In November 2013, Litecoin touched a high of $50. However, the spurt ended soon, and its price hovered under $5 during 2015 and 2016. It began the year 2017 with a price of $4.33 and reached $64.73 on August 28.
One reason for Litecoin’s uptrend during 2017 was Charlie Lee’s take on Segregated Witness, or simply SegWit, and its subsequent adoption. Lee advocated for SegWit to be activated on Litecoin and Bitcoin. During the pre-adoption period he said, “So you may wonder why I’m pushing for SegWit. Litecoin does not have a block size problem. That’s right, and SegWit is not just a block scaling solution. I would even say block scaling is just a side benefit of SegWit. The main fix is transaction malleability, which would allow Lightning Networks(LN) to be built on top of Litecoin. And there are a bunch more nice features of SegWit.”
Currently 40% of Litecoin’s trade volume is in Chinese Yuan (CNY), followed by 24% in South Korean Won (KRW), and 17% in U.S. Dollar (USD), while almost 17% of trade volume is in Bitcoin as per data from CryptoCompare.
The rising trade in CNY and KRW, coupled with a slide in Bitcoin Cash’s price, suggests that investors are moving from Bitcoin Cash to Litecoin since these two currencies have been primarily active in Bitcoin Cash trading as well.
The tilt toward Litecoin is partly because SegWit, which is already active on Litecoin, is now active on Bitcoin, and this allows cross-network transactions between the two.
“Two users can trade BTC and LTC instantaneous and without risk. Efficient decentralized exchanges are now possible. Or what if a merchant accepts only BTC but you only have LTC. You can now pay LTC and exchange them instantly through a LN exchange node and send BTC to the merchant. That’s basically decentralized ShapeShift.” This benefit was mentioned by Charlie Lee back in January.
With SegWit now active on Bitcoin, the usability and appeal of Litecoin is likely to stay intact. Litecoin’s market capitalization is now at $3.43 billion.