Litecoin has shot up in value this week, up 50% due to a series of factors that are all bullish for Charlie Lee’s blockchain. The primary reason in my mind was the announcement of Litepay, a new payment processor to be launched Feb 26. Litepay is modeled after Bitpay, but obviously using Litecoin instead of Bitcoin.
Litepay plans to offer a variety of services including taking LTC payment in fiat. There is also a VISA-powered debit card planned, rumored to be offering 1% fees, so this actually seems a bit more ambitious. But this certainly wasn’t the only factor putting upward pressure on the LTC price – there was a barrage of announcements all of which were positive.
Charlie Li originally forked the Bitcoin blockchain in order to replace the Proof-of-Work algorithm back in 2011. This was one of the very first altcoins to fork off, and it was largely reaction to the prospect of ASICs (specialized hardware) starting to dominate the mining landscape. So Charlie decided to replace the SHA256 hashing function in Bitcoin with one called scrypt that looked more resistant because it required much more memory – something which is relatively expensive, leveling the playing field.
He also shortened the block discovery time from being targeted at 10 minute intervals to just 2.5 minutes. To my knowledge those were the only changes originally, and it remained pretty much useless and unused until 2017. The party line was that Litecoin was silver to Bitcoin’s gold but that line never made any sense to me.
Fast forward to 2017 and Charlie Lee is still as active as ever, and has backported or actually pre-emptively implemented every added feature of Bitcoin. So when Bitcoin transaction fees started to get out of control these past few months, Litecoin looked more attractive than ever. Cheaper fees, quicker transactions and all the good stuff in a coin that’s been around for over six years.
Not only did people realize they could do cheap, quick transactions on Litecoin, criminals started using Litecoin on dark markets for the same reasons, despite people in the know predicting a rush to Monero. I too was surprised to see more enthusiasm for Litecoin than Monero, since Litecoin is an open blockchain just like Bitcoin and offers no privacy protection whatsoever.
But in fact Litecoin turned out to have some advantages too for the dark web vendors. They dare not keep large amounts of funds online, so hardware wallets are probably the common choice (as it is among everyday folks too) but hardware wallets typically support only a few cryptocurrencies. Trezor, Ledger Nano, KeepKey – all store Bitcoin and Litecoin, but a Monero hardware wallet is not on the market yet.
As if that weren’t enough to propel Litecoin to new highs, a group called LitePal announced it would roll out a Paypal-like service aimed at merchants. They claim they’ll accept common cryptocurrencies as well as legacy payment systems like Paypal.
Finally, a fork was announced called Litecoin Cash. This will fork at block 1371111, which is likely this coming Sunday. Each hodler of LTC will get 10 LCC for each Litecoin. The total supply just happens to be 10x that of Litecoin too.
The most significant change they’re making seems to be the reversion back to SHA256 Proof of Work. They do this to offer another alternative to all the ASIC-based hashing power out there. Maybe it will attract lots of older ASICs who will find a new lease on life with Litecoin Cash, who knows?
Final comment about Litecoin Cash is about claiming yours. The LCC are sent to your same address that hodls LTC. If you think about it, that means you’ll need to use your private key to claim, move, spend yours. So it’s very important to first move your LTC to another address. Then, and only then use your private key to claim your LCC. In case it’s not obvious why consider that the place where you’ll claim your free LTC could take that private key you offer and steal any LTC you have there. So move your away LTC first!