Will LTC Recover Following The MimbleWimble Update?

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1 year ago

Just as the core Litecoin developers intended, the LTC cryptocurrency is currently heavily used across the world for daily financial transactions. Right from its inception, LTC was designed to be a sort of ‘silver’, if you will, to Bitcoin’s ‘gold’.

And it has stood true to this test over time, only recently leaving the top ten rankings of cryptocurrencies by market capitalization. Recent network upgrades on the LTC blockchain, in conjunction with continued growth in mass adoption, are however likely to see the price of LTC approach the $1000 mark according to optimistic projections.

A key attraction for the LTC cryptocurrency is the familiarity that comes with being a decade old. LTC enjoys similar Lindy Effect advantages to BTC, both enjoying almost similar lifespans so far.

The LTC blockchain is also cheaper and faster to use, compared to both the BTC network and the ETH ecosystem. This presents valuable advantages especially for institutional users in the finance space who would like to capitalize on quick, cheap transactions.

How Does Litecoin Achieve Such Quick Transaction Times?

Litecoin was amongst the very first blockchains to adopt the Layer 2 Lightning Network for faster, cheaper transactions. It has a block time of about 2 minutes, compared to BTC’s 10-minutes, which means that LTC is a much faster blockchain.

Where the LTC network handles 50 transactions per second, the BTC network only manages 5 per second.

Litecoin’s Crypt Hashing Algorithm also allows miners to add blocks to the chain just using normal laptop computers. Whilst maximizing decentralization, this feature also levels out the playing field for just about anyone with a laptop to mine LTC.

Some Litecoin Tokenomics

There will only ever be 84,000,000 LTC tokens mined. Just like Bitcoin, the LTC blockchain follows a 4-year halving cycle; mining rewards reduce by half every four years. The current LTC mining reward is 12.5 LTC, with the next halving expected in August 2023.

To add to the decentralization feature mentioned above, it is worth noting that not a lot of whale accounts exist on the LTC network, save for major exchanges. Well-executed decentralization is an attractive feature for any cryptocurrency, especially those like LTC which hope to grow into global currencies.

LTC did not have any pre-mines at launch, and everybody (including the founding team) began to mine the crypto at the same time.

The Litecoin MimbleWimble Update

The MimbleWimble Update is an opt-in upgrade on a parallel chain on which users can choose additional privacy. This upgrade effectively turns LTC into amongst the biggest privacy tokens there, further strengthening its bull case.

For users who join the upgrade, the wallet addresses of transacting parties are hidden. This means that no other user gets to see your coin balance, as currently happens on the LTC mainnet. Only the sender and the recipient see the amounts being transacted.

LTC Founder Charlie Lee argues that this upgrade is an important feature in a world where privacy rights are an increasingly important consideration. His long-term vision, he says, has always been that blockchain transactions are shrouded in some form of privacy that protects users on the network.

In Conclusion; LTC Future Prospects

The recent MimbleWimble upgrade has likely reinvigorated interest and positive sentiment in the LTC network, even as this early coin hangs precariously onto the Top 20 highest cap coin list. LTC however still enjoys a certain pedigree that is attractive to institutional investors. After all, this cryptocurrency has been around since 2013.

PayPal also recently announced that LTC would be one of 4 cryptocurrencies that it would start supporting for US customers.  As general crypto adoption grows globally, LTC sits in a prime position to capture a nice chunk of the institutional market, especially given its rapid transaction times and cheap transactions costs.

However, since financial transactions are the only use-case for LTC, it’s interesting to see how adoption for the coin moves over the next few years. This might turn out to be the reason why the coin has dropped in ranking over the past several months, as the buzz and sentiment shifted to more exciting and innovative crypto projects.

There are also valid concerns that the recent MimbleWimble privacy upgrade, together with increased crypto adoption might aid money laundering activity around the world. Although global surveillance technologies available to authorities also continue to improve, making such activity much easier to spot, such concerns do slow down LTC and general crypto adoption.

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1 year ago