Recently Litecoin, one of the major altcoins, has hit the news several types due to various events. Some people claimed Litecoin is dead, while others see a bright future for the altcoin. No matter which side to take, you need to be up to date with the recent event. Let’s summarize what happened in the past couple of weeks with Litecoin.
What is Litecoin?
Everyone knows Satoshi Nakamoto’s name, who is the creator of Bitcoin. But have you heard about Charlie Lee? He is the one who has brought Litecoin into life. The ex-Google developer wanted to create a “lighter version of Bitcoin” where the transactions are cheap and quick so the coins can be used in everyday life. Litecoin was introduced in October 2011 on Github as a hard fork from Bitcoin core protocol.
The project is completely open-source with Charlie Lee being the head developer. There are a couple of difference between Litecoin and Bitcoin. There will be 84 million Litecoins (vs. 21 million of Bitcoin) in circulation once everything is mined out with the Scrypt (vs. Bitcoin’s SHA-256) algorithm. The mean blocktime is 4x lower than what is experienced on the blockchain and the block rewards are halved after every 840000 blocks (as opposed to Bitcoin halving at every 210000 blocks).
Litecoin Pros and Cons
There are a couple of advantages of Litecoin compared to Bitcoin. Because of the lower blocktime, the transactions on the Litecoin network are incredibly fast. The quicker block production also means there is only a little time window for double-spending, which make the blockchain more secure. These along with the lower transaction fee make Litecoin a real competitor compared to Bitcoin.
And as with everything, Litecoin also has some drawbacks. Although Litecoin indeed has introduced several upgrades to the Bitcoin protocol, at the end its features by now are not unique on the market. There are many other altcoins which offer cheap and fast transactions but offer something additional to the users, like additional privacy or a whole new economy. Furthermore, by now, the project has been largely depending on the creator of Litecoin, Charlie Lee, so his statements on social media have a direct impact on the price movements which make the coin vulnerable to external events.
During the past couple of weeks, there has been a couple of important events on the Litecoin space which had a direct or indirect impact on the price. Let’s see these events one by one: halving, dusting attack and project abandonment allegations.
Litecoin has just been through the second halving event on August 5 when the block reward has been halved from 25 LTC to 12.5 LTC. At the time of halving, around 63 million coins had been issued, which is 75% of the total supply. This leaves an additional 21 million LTC to be mined, with a current value of $2 billion.
The digital silver’s hashrate has been increasing since the beginning of 2019 which implies Litecoin miners do not worry much about the drop in their mining rewards. Although the general sentiment on the market before the halving was rather pessimistic suggesting that miner would stop mining Litecoin at lower reward, in reality, the overall Litecoin network remained unaffected.
Right after the halving event, Lee posted on Twitter, saying that
“Seems like miners have not shut off their hashrate at all. Instead, we are mining at a rate of a block every 1.4 minutes on average, which is much faster than the expected 2.5 minutes.”
However, a couple of mining pools have indeed suffered losses because of the event which is effecting their long term profitability. Out of the 6 largest mining pool, only 3 are profitable at the moment.
The halving event had a 10% surge on the Litecoin price on the day of the halving, but within 24 hours the prices were back to the prior level. On August 5, the volume had increased by 50% but this also dropped back to the average volume just a day after.
Dusting attack against Litecoin
Binance claimed on Twitter in a tweet just a week ago that a dusting attack occurred against Litecoin.
A dusting attack is a new king of malicious activity in the cryptocurrency space. During a dusting attach, hackers, break the privacy of users by sending a small fraction of coins to their personal wallet addresses. The aim of the attack is to tie together these different addresses and identify them as belonging to the same wallet owner. The scanners analyze the transaction data and put together the big picture. Once the owner of the wallet has been identified, the scammers can execute further scams using their identity information.
Dusting attack are a less-known but widespread security threat in the cryptocurrency space which raises concerns of an altcoin privacy feature that can hurt in the long run the adoption of the coin.
No updates in 2019
Just after Binance has been releasing the information about the dusting attack a lot of FUD has been arising in terms of the lack of recent updates to the LTC protocol.
Since Litecoin is a fully open-source project, anyone can follow the project development directly on the Litecoin GitHub. Several users have pointed out that there were not code commits in 2019 which would suggest on the surface that there was no development work going on during the past months.
Charlie Lee has addressed the concern in a series of tweets published on Twitter.
“Recently there’s been a lot of FUD about Litecoin having no code commits in 2019. When you look at Litecoin GitHub, it would seem like we did no work in 2019. There are actually 2 reasons why this is the case even though we have been developing.”
Lee has explained that most of the updates to Litecoin are linked to Bitcoin’s updates shoring the original development dates in GitHub. Secondly, Litecoin developers are not updating Litecoin’s GitHub constantly but working on personal branches.
Ongoing development work is crucial for cryptocurrencies to protect the network from hackers and stay up to date with technologies innovation to provide an industry-leading product. Lack of development always raises concerns from the user side, be it a FUD or a reality which prevents adoption and has a negative effect on the price.
What to expect in the future
The next milestone in Litecoin’s life will be the Litecoin Summit, held in Las Vegas. In this October the whole Litecoin family will meet together on the event organized by the Litecoin Foundation. Hopefully, this event can increase the interest of the crypto adopters towards Litecoin and bring in new ventures to the project.
In terms of the price movements, there is always an ongoing anticipation on the market that the altcoin season is about to come bringing in great price appreciation for several coins. It is also possible that “moon” just never come if there is not enough value for the users behind a project. Litecoin must come up with something new which it can offer to its user base otherwise it will just sink the ocean of disinterest on the long run.