Litecoin has been in the news a lot lately. The price is well below its all-time high, but its performance in recent months has not been bad at all. He has recovered quite a bit this year. Just recently, the protocol halved the reward miners receive for completing transaction blocks. For the miners, this undoubtedly was a very hard blow to their pockets. However, the rest of the community, it seems, accepts the mechanism as something positive in the long term. In fact, the price responded favorably during those days. However, the project has not been without criticism. It is well known that its creator, the influential Charlie Lee, sold all of his litecoins. Certainly an intriguing fact that at first glance gives off pessimistic signals. Of course Charlie has an argument in his defense, but some don’t believe him. Its developers have also been accused of abandoning the project, because they have published almost nothing in recent times. Let’s talk about Litecoin. What is Litecoin really? What is really happening?
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According to the bible, God’s coins are gold and silver. Universally, these precious metals are synonymous with value. In the world of cryptocurrencies, Bitcoin has always been associated with gold. In fact, it is often called “digital gold.” This analogy is very common, and is used frequently. The origin of the phrase is not really known, but everything seems to indicate that its popularity began when the journalist Nathaniel Popper used it as a title in a book that became very popular. It turned out to be a powerful metaphor and people liked it very much for its great appeal. Of course, the word “mining” that refers to the way to obtain bitcoins with computing power is highly suggestive. Obviously, it evokes the exploitation of precious metals. The most valuable metals are rare and limited supply items. Indeed, they are excellent means of safeguarding value. For fiat currencies, we cannot say the same. Gold is probably the most iconic of the precious metals. It is followed by silver, of lower value and somewhat complementary to gold. In the crypto world, Bitcoin is gold, and Litecoin is silver.
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What is Litecoin? It is a cryptocurrency technically very similar to Bitcoin, but it differs in some respects. Litecoin is faster, cheaper, and more abundant than Bitcoin. The Litecoin code is based on the Bitcoin code. However, the block on the Bitcoin blockchain closes every 10 minutes. On the Litecoin blockchain, that happens every 2.5 minutes. This means that transactions with Litecoin are 4 times faster than with Bitcoin. In relation to costs, transacting with Litecoin costs considerably less than with Bitcoin. Sending $ 10 worth of Bitcoin could cost a third of that amount. Sending that very thing in Litecoins could cost a penny. In that regard, Litecoin offers a great advantage. Furthermore, Bitcoin is scarcer than Litecoin, because its maximum supply is only 21 million units. Meanwhile, the maximum supply of Litecoin is 84 million.
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Of course there is another technical difference, but this one has lost its relevance over time. I mean the mining algorithms that are different. Litecoin uses the Script algorithm while Bitcoin uses a SHA245. In short, it could be said that mining Bitcoin requires more effort due to the great mathematical complexity to be solved that its algorithm demands. The Litecoin miner favors RAM size and processing power over power to solve complex problems. This change was implemented with the aim of discouraging mining with ASICs, but the manufacturers of these devices have learned to conquer that algorithm as well.
Previously, when gold coins were used for commercial exchange, silver coins were used for the smallest transactions. In this sense, these two metals complemented each other. The creation of Litecoin was inspired by a similar idea. It has never intended to compete with or replace Bitcoin. It just wants to be like Bitcoin, but for small transactions, a cryptocurrency designed for retail. Ironically, its adoption is vastly lower than Bitcoin in that area, but that’s the basic idea behind Litecoin, small operations.
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Who is the creator of Litecoin? Satoshi Nakamoto is the anonymous and late creator of Bitcoin. Charlie Lee is the public and notorious creator of Litecoin. He was born in West Africa, specifically in the Ivory Coast. His parents, of Asian descent, lived there for several decades, but moved to the United States when Charlie was 13 years old. He studied computer science at MIT and graduated in 2000. For a time, he worked for Google, and was involved in the Chrome OS project. In 2011, while still at Google, he first read about Bitcoin in an article and was fascinated. He began experimenting with mining. He bought Bitcoin at $ 30 and saw it drop to $ 3. It was then that he first contemplated the idea of creating his own cryptocurrency. His first project was called Fairbix, but it failed mainly due to technical problems. A few weeks later, in October 2011, it launched Litecoin. He worked for Coinbase for a time, but resigned in June 2017 to dedicate himself fully to Litecoin. Well, here I must mention that the price of Litecoin for years was stagnant below $ 4. However, starting in May 2017, the price skyrocketed dramatically. On December 19 of that same year, the price reached its all-time high of $ 375.29. Charlie Lee is not the least bit stupid. He left Coinbase at the best of times. It seems that knowing how to time things properly is among his great talents.
Charlie Lee, on several occasions, has acknowledged that when he started the project his expectations were not very high, and he neglected the matter for several years. It is true that its origins were very humble, but Litecoin has grown and today it is among the main cryptocurrencies in the ecosystem. It is ranked # 5 on CoinMarketCap, with a market cap of over $ 5 billion. Sure, Bitcoin is 37 times bigger, but there is no denying that Litecoin is a gamer worthy of attention and respect. It has always been among the top cryptocurrencies on the market.
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With the bearish season of 2018, Litecoin was one of the most affected cryptocurrencies, but this year its recovery has been remarkable. It is still a long way from its all-time high, but today it is much better than before. Of course Charlie Lee is not very concerned about the swings in the price of Litecoin, because it does not have. He recognizes that he only has a few, only for testing. By pure chance, he came to sell all his litecoins when the price was near the top, and just before its abysmal decline. According to Charlie, this decision was not motivated at all by financial reasons. On the contrary, he did everything for the good of the project. Litecoin went from $ 4 to $ 375 in a matter of months. However, he assures that it was impossible for him to know then that Litecoin was overvalued and that the price was about to fall. According to him, having litecoins in his pocket hurt the project, because he thought more about his personal gains in the short term than the good of the project in the long term. The truth is that Charlie Lee is the captain of a ship in which he does not have a specific participation. After his controversial sale, his bond with the project is essentially emotional. For some, that is not enough. They want a captain who is the last to leave the bank, and not someone who can command the ship by remote control so as not to lose “objectivity.”
Starting in August of this year, Litecoin miners began receiving half of the rewards they previously received for their work. The Litecoin protocol states that there is a halving approximately every 4 years. This is the second in its history. For the miners it was surely hard, but the price reacted optimistically after this event scheduled and classified as normal. As the issuance of new litecoins is lower now, this relative scarcity enhances their value. The next Litecoin halving will be in 4 years.
Recently, Litecoin was the main target of a series of cyberattacks. The exchange Binance reported that it was the victim of attacks directly related to litecoins on its platform. Apparently, the matter did not go to major. However, it brings us to the subject of development. Litecoin abandoned? Have the developers neglected the project? The abandonment allegations stem primarily from an apparent absence of work at Litecoin GitHub. In other words, its developers haven’t released much this year when it comes to code updates for the near future. Charlie Lee has justified this apparent absence, arguing that they are very fixated on updates designed for Bitcoin, and the few developers that Litecoin has are working on, but they have simply decided not to publish much of this work on GitHub.
Litecoin’s main problem probably lies in its limited adoption and its price volatility. For a cryptocurrency specially designed to become a medium of commercial exchange, the fact that it is not very popular with traders should be among your first concerns. Surely, the Litecoin community does have plans for the future. However, we all have plans. More than plans, results are necessary. The work must bear fruit. Litecoin will be digital silver, the crypto of commerce, only if it is used.
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What is Litecoin and what is really going on?