Since its appearance in 2008, Bitcoin (BTC) has generated a revolution in the world economy, and even with the appearance of thousands of new cryptocurrencies after it, Bitcoin has managed to remain the queen of the crypto world.
This success is related to its acceptance among people, its applicability, and the problems it solves; Bitcoin is used today primarily as a store of value.
In this sense, one of the best-known cryptocurrencies is Litecoin (LTC), an asset almost as old as Bitcoin, with similar, but improved features and that, despite the years, still remains among the main cryptocurrencies in the industry.
Answering the question, is Litecoin still relevant?
The answer is a resounding yes. Litecoin still has relevance, and you can observe this in the fact that every day more and more people are switching to Litecoin, its transaction volume may even surpass Bitcoin, it has an active developer community, and is being upgraded with technology that will not only benefit its users but will also serve as a testing ground for Bitcoin developers seeking to scale Bitcoin without breaking it.
Litecoin is an affordable cryptocurrency with a large circulation in the crypto ecosystem and in this article, you’ll learn about the most important features of Litecoin and its relevance in the market insha’Allah (God willing).
What is Litecoin and why is it said to be silver to Bitcoin’s gold?
Litecoin is currently one of the most important cryptocurrencies in the crypto industry. It’s a Bitcoin-inspired coin that is currently in the top 20 cryptocurrencies by market capitalization, with a current price of around $100+. It was launched on November 9, 2011, by Charles Lee, a former Google developer.
Litecoin is based on philosophical and technical principles very similar to those of Bitcoin, but with some substantial differences that, as its name suggests, make it “lighter” or more accessible, such as:
- A less resource-hungry PoW mining algorithm
- Higher transaction processing speed
- A larger supply of coins on the market
Currently, you can exchange LTC for most other cryptocurrencies, make purchases on many online shops, and mine the currency on common computers, thanks to its proof of work algorithm (Scrypt).
In the words of Charles Lee himself:
“Litecoin (LTC) was created in 2011 in an efort to introduce a cryptocurrency with increased accessibility and transaction throughput that would be better suited for payments to serve as a complement to Bitcoin’s more natural utility as a store of value. As such, the Litecoin vs. Bitcoin narrative oversimplifies the relationship – more accurately, Litecoin has become the silver to Bitcoin’s gold.”
Features and benefits of Litecoin
We already mentioned that Litecoin shares many of the characteristics of Bitcoin, so much so that Charles Lee says that its objective is not to compete against Bitcoin but to serve as a complement to it.
We can say that Litecoin is an anonymous currency to a certain extent since although the identity of the users is hidden when making transactions, they’re still traceable – something that will soon be solved with the Mimblewimble update.
Another important aspect of Litecoin is in its decentralized design, something that prevents a single person or organization from being able to influence the future of the currency. In the same way, no one can carry out fraudulent operations or hack the network, since it doesn’t have a single vulnerable point where it can be attacked.
Additionally, Litecoin transactions are recorded in blocks that are updated every 2.5 minutes, compared to Bitcoin’s minimum 10 minute transaction time, which increases the overall speed on its blockchain. This speed also makes Litecoin cheaper to use, boasting very low transaction fees since its launch.
Being an old and well-known cryptocurrency, many people and businesses already use it in their transactions frequently. Over the years, Litecoin has built a solid reputation and trust among crypto users as a reliable and dependable blockchain to use.
Litecoin is also flexible, as it has an open-source protocol that makes it possible for improvements to be added over time. This also allows anyone with minimal resources to mine Litecoin with relative ease.
Litecoin also has a much higher coin supply limit than Bitcoin, which is 21 million units, while in LTC it is 84 million units.
Why Litecoin is relevant now and why will it remain so in the future?
Many people consider that Litecoin has been slowly outperforming Bitcoin and other cryptocurrencies; in its more than 10 years of existence, it has become one of the most valuable and popular cryptocurrencies in the crypto world.
The whole series of features and advantages that we have already seen, defines it as an alternative crypto asset that allows instant payments at a very low cost, and that also has great support and trust in the crypto community.
Since much of Litecoin mining can still be done using GPUs, this makes Litecoin more affordable to mine than Bitcoin.
Litecoin is still heavily used and many merchants are accepting it
The speed of transactions on the Litecoin network makes it much easier to use for e-commerce, which is one of the most suitable environments for its implementation.
Every day, the number of merchants, exchanges, wallets, and other infrastructures that are integrating Litecoin in their operations is increasing.
This relates to the fact that the asset is available on a wide number of exchanges, which means that more units of LTC can be easily converted to cash. This increases the liquidity of the cryptocurrency, which is essential for its success.
Litecoin is a testing ground for possible Bitcoin upgrades
Recently, the Litecoin Foundation has completed the code for the Mimblewimble Extension Block (MWEB) update that seeks to improve the scalability and privacy of the cryptocurrency.
The MWEB update will allow Litecoin to include some essential features that it currently lacks: fungibility and privacy. The Mimblewimble code has already been completed and will most likely be activated by the end of 2021.
This new protocol allows the use of confidential transactions on the Litecoin network, allowing senders to encrypt the currencies they wish to send using “blinding factors” while confusing the addresses.
In addition, MWEB will allow to further improve the degree of scalability of the network thanks to the use of interconnected adjacent chains that run in parallel to the main chain of Litecoin.
This flexibility of Litecoin to accept improvements over time with relative ease is something that compliments very well with its similarity to Bitcoin, as it serves as a testnet for future improvements to the mother of cryptocurrencies.
LTC transaction volume may even pass Bitcoin
Litecoin has been around for a long time, but its increased supply of coins could offer a psychological advantage over BTC and other altcoins within a very short time, mostly due to its lower price in the market.
A good sign that the use of LTC is increasing is the news of its recent institutional adoption by a giant like PayPal in its new strategy of allowing the use of cryptocurrencies within its platform. In fact, more and more companies are adopting decentralized financial solutions to alleviate their current operational problems.
Yet the main problem with adoption has been the slow processing speeds, but in the case of LTC, it seems to have found a solution thanks to its Scrypt algorithm. This has increased the number of online businesses that use it as a cheaper and faster alternative than other altcoins.
If this adoption continues by more and more organizations, not only the price but also the volume of transactions on the LTC network will increase.
There are two main apparent reasons for this:
- The environmental problems that Bitcoin mining causes, something that doesn’t happen with Litecoin thanks to its Scrypt algorithm.
- Most people who own BTC use it as a store of value similar to gold, while LTC is mainly used for day-to-day transactions.
Litecoin price prediction
We already know that Litecoin is relatively cheaper than other coins with a current price hovering around $100+, but this could change in the near future.
Keep in mind that the prices of stocks, raw materials, metals, and cryptocurrencies, prosper thanks to other factors that influence the economy, such as positive press, the patronage of common people, and the laws of supply and demand of course.
Because scarcity is an important part of supply and demand, once an asset becomes scarce and more people demand it, prices tend to rise as many holders will be willing to sell it for a profit.
If Litecoin usage continues at a good pace, and this is combined with the upcoming improvements to the network in terms of processing and confirmation time, Litecoin could trade at a price that easily surpasses $1,000 by 2025 and $2,000 by 2030. Some analyzes indicate that the price could even reach $500 by the end of 2021.
Today, priced at $120, investing in 10 LTC would cost you only about $1,200. You cannot say the same of other cryptocurrencies with similar features.
Undoubtedly, thanks to these trends and projections, in the coming months, many new users will be involved in LTC, seeking faster rewards and higher profits in the medium and long term.
If we see Litecoin as an undervalued currency today, it could become more profitable than other crypto assets in the next price change.
Is Litecoin halal?
We are seeing a growing number of scholars that are beginning to hold the opinion that cryptocurrency is halal. Some scholars will say that Litecoin is halal because it can be classified as “mal” (property), has “taqawwam” (permissibility according to the shariah), and meets the objectives of shariah (Maqasid al-Shariah). Some scholars will categorize Litecoin as a currency while others categorize it as an asset.
For a deeper understanding of the permissibility of cryptocurrencies, please see the following blog post, Is Bitcoin Halal? 10 Scholars’ Opinion on Bitcoin.
Litecoin is one of the oldest and most stable cryptocurrencies on the market. Those who are interested in Litecoin tend to seek benefits both in the short and long term since it is an ideal cryptocurrency for those who carry out a lot of transactions on a regular basis and think about saving costs.
If we also take into account the upcoming improvements to LTC’s features, in addition to the adoption of large corporations and its low price, Litecoin is seen as a tempting buy at the moment. This means that more and more users will undoubtedly adopt it, as long as the future looks promising, as it looks now.
And in the end, Allah knows best.
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