Litecoin Explained – Chapter 2: The origin and development of Litecoin

Litecoin Explained – Chapter 2: The origin and development of Litecoin

31 July 2019

Vontobel now offers investors access to the crypto currency «Litecoin». But what is Litecoin (LTC)? In three chapters, we want to give you high-quality knowledge about the exciting topic of «Litecoin».

Where does Litecoin come from?

The creation of Litecoin coins was determined by the Litecoin Protocol and is therefore decentralized. The maximum number of Litecoins that will exist may not exceed 84 million coins. However, not all Litecoins have yet been generated. At the moment there are about 63 million Litecoins in circulation, i.e. about 75% of the planned total amount. As soon as approx. 68,000 more coins are generated from now on (as of 31 July 2019), the reward for a generated block will be adjusted from 25 to 12.5 Litecoins. This is expected to happen on 5 August 2019. The current key figures for Litecoin can be viewed at Litecoinblockhalf.com.

Who invented Litecoin?

Charlie Lee («SatoshiLite») released the Litecoin on 7 October 2011 on GitHub (an online service that provides software development projects). At that time, he was still employed as a software developer at Google. Litecoin is a fork of Bitcoin. However, it has so many similarities to Bitcoin that it doesn't even have its own whitepaper and was created from Bitcoin’s source code. However, Litecoin features faster block generation, a higher total amount of coins, a modified hashing algorithm and a modified user interface.

Lee runs the Litecoin Foundation, a non-profit organization that aims to promote Litecoin through the development and promotion of advanced blockchain technologies. It has created its own crypto debit card in cooperation with the crypto exchange Bibox and the blockchain company Ternioins. It is a Litecoin version of the already available debit card from Ternio. This enables users to spend their crypto assets both at online merchants and in selected stores. Lee also held the position as Director of Engineering at Coinbase, one of the most popular trading platforms for crypto currencies. However, in June 2017, he left the company to focus full-time on the Litecoin project. The following year, he confirmed rumors that he would also sell or donate his own Litecoins. The reason for that was the existing «conflict of interest»: his role as a leader would prevent decentralization.  

His brother Bobby Lee is also active in the crypto scene: He founded and managed a trading place for Bitcoins called «BTC China» which temporarily held a leading position among all crypto trading platforms worldwide. But in 2017, the Chinese government stopped exchanging the national currency Yuan for Bitcoin in order to prevent capital flight. BTCC was then sold to a Hong Kong investment fund.

How has the Litecoin price developed since its inception?

Litecoin was published on 7 October 2011, but its quotation at first started on 28 April 2013. Litecoin has experienced strong price fluctuations. At the beginning of December 2013, an improved version was launched on the market, whereupon the price moved in the double-digit range for the first time. The new version reduced transaction fees by a factor of 20 and improved performance and security. After a long period of stagnation until spring 2017, the price then rose steadily until it peaked at USD 360.66 per Litecoin on 18 December 2017. Although the price moved back to a double-digit price level in December 2018, an upward trend can be observed. Crypto experts justify this with the next halving, which will take place in August 2019.

 

Which factors influence the price of Litecoin?

In addition to the upcoming halving event, media attention, security, currency longevity and the price development of other crypto currencies (especially Bitcoin) may have an impact on the Litecoin exchange rate. Litecoin's limited supply of 84 million means that as demand for LTC increases, so does the price.

At present, Litecoin is not yet accepted as a means of payment by companies or consumers as much as Bitcoin. However, some Litecoin supporters see potential in its blockchain technology and believe that it is very likely that Litecoin could become a commonly accepted means of payment.  Since Litecoin is faster and cheaper than its Bitcoin, which is still struggling with the scaling problem. The original idea was that Bitcoin would mainly be used as a store of value or for really large transactions. Litecoin, on the other hand, would be used for lower and more frequent transactions.

 


  

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08/12/2019 22:51:16

 

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