In Q2 2021 Litecoin saw the most significant US$ value transfer over its network in its almost ten-year history, totaling US$28,1 billion or 91.1 million Litecoins. This value eclipses the previous largest day printed on December 21 in 2017, which reached $11.5 billion.
Litecoin was created by Charlie Lee as a fork of Bitcoin in 2011 and as such remains the most enduring altcoin in the cryptoasset sector. As the Litecoin Foundation, the non-profit organisation dedicated to promoting the decentralised payment network noted on 22 June 2021, Litecoin continues to have 100% uptime, maintaining security and transparency for users.
Regardless of price,#Litecoin will continue to…— Litecoin Foundation (@LTCFoundation) June 22, 2021
• have 100% uptime
• be transparent
• offer incredible speeds
• be censorship resistant
• provide store of value
• give you freedom
Day and night, block after block
Litecoin is here to stay ⚡️
While in Q2 2021 it has been overtaken in the top 10 most valuable cryptoassets by market cap, Litecoin’s stability and longevity remains an important factor in institutional portfolio allocation.
"As demand for digital assets amongst the traditional investment community steadily increases, we are starting to see the green shoots of demand for investment exposures outside of the top two dominant networks," Frank Spiteri, CRO at CoinShares.
As we heard in Q1 2021, Grayscale bought 80% of all Litecoin mined in February (over 174,000 LTC), demonstrating demand among accredited and institutional investors for the premier altcoin.
The release of physically-backed Litecoin ETPs by ETC Group’s Litecoin ETC (ELTC) on Deutsche Börse XETRA on 12 April and Coinshares (LITE) on the SIX Swiss Exchange on 6 April 2021, reflect this growing appetite for a greater depth of cryptoasset allocation. As the name suggests, Lee’s intention for Litecoin was to be a ‘light’ version of Bitcoin: an altcoin more suited to payments than the original cryptocurrency, with faster transaction times and lower fees.
Litecoin Core, the code that underpins the blockchain, is written in the highly-popular and common programming language C++, while Python is used for some ancillary tools. That means its code is simple for external developers to use and understand.
With its faster block times and higher transaction throughput, Litecoin was conceived as a more practical and scalable medium of exchange than Bitcoin. The growing results of this can be seen in Litecoin’s daily active addresses, which grew strongly in Q2 2021 to an average of over 300,000 users.
The stability of its transaction fees — as Litecoin is used primarily as a payments network — is key, and we saw network fees rise only 11% to a median of less than 1 US cent per transaction.
In terms of adoption, the number of companies accepting Litecoin also increased 73.4% to 2,713 in Q2 2021, compared to 1,565 in Q2 2020.
"Litecoin has grown by 342% in the past 12 months and is the ninth-largest cryptocurrency by market capitalization at US$14.6 billion with growing interest from institutional and retail investors." Bradley Duke, CEO, ETC Group.
In March 2021, The Litecoin Foundation completed the code for MWEB (Mimblewimble via Extension Blocks), an essential upgrade to the Litecoin protocol. With this update, Litecoin will become more scalable and able to transaction amounts un-viewable to the public, making it the best choice for payments while protecting sender/receiver’s data.
Litecoin’s implementation of MWEB continues apace, and a 5 May 2021 update noted that the privacy and scalability update remains on track for launch the end of 2021. Lead developer David Burkett has added automated builds for Linux and Windows, allowing for faster feedback, as well as allowing non-developers to aid with testing without needing to build the code themselves.
On 19 June, the largest supplier of cryptocurrency mining machines, Bitmain, announced it would release a new ASIC-based Scrypt miner that is four times faster than current hardware. Journalists at the event reported the L7 miner purports to have a hash rate of 9500MH/s. Scrypt is the consensus algorithm that secures Litecoin, along with several other cryptocurrencies including Dogecoin, Digibyte and Verge. Quicker and more readily available mining systems are expected to make securing Litecoin’s network more simple and cost effective, as well as upping transaction process throughput.
Litecoin does get additional value from being so closely tied to Bitcoin and is commonly referred to as the ‘digital silver’ to Bitcoin’s ‘digital gold’. Both assets have a hard-capped supply that gives the assets a scarcity aspect similar to precious metals. However, the developments we have seen this quarter run far beyond that simplistic analogy.
And while Litecoin has fallen out of the top ten crytpoassets by market cap in Q2 2021, significant upcoming technical developments may pull it back into contention.
The development of the Litecoin project is overseen by a non-profit Singapore-based Litecoin Foundation, with Charlie Lee as a managing director. Although the Foundation and the development team are independent, the Foundation provides financial support to the team.
MWEB represents is a significant evolution for the Litecoin protocol, promising to improve privacy and fungibility and its release towards the end of 2021 is on track, according to the Foundation.
And so while comparatively little academic or media attention is focused on Litecoin, its network effects continue to improve. Now in its tenth year of 100% uptime, Litecoin remains a secure blockchain with a large user base, and the addition of institutionally-focused ETP products is testament to this effect. More institutional investors are seeking exposure to Litecoin but, true to the ETP theme across cryptoassets, want it with the safety and liquidity of a centrally cleared exchange-traded product.
Litecoin has also benefited and is continuing to benefit from the recently released Checkout with Crypto service from PayPal. Users can now use digital currency to purchase on all 29 million merchants that accept PayPal.
Disclosure | Copyright © 2021 ETC Group. All rights reserved
Credits: Article layout originally inspired by James Wang
Terms of Website Use
If you continue to use our website, you are deemed to have read and accepted our Terms and Conditions as set out below:
This website is for information only. It does not provide investment, tax or legal advice or recommendations. According to the applicable laws and regulations in your jurisdiction, some contents on this website or the access to certain contents on this website might be restricted.
Disclaimer: The material and information contained on this website is for informational purposes only and ETC Management Ltd, its affiliates, and subsidiaries are not soliciting any action based upon such material. The material and products do not represent or shall not be inferred as an offer or a recommendation to buy or sell a security, nor shall it be considered or treated as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on any information.
Distribution of Information:
The distribution of the information and material on this website may be restricted by law in certain countries. None of the information is directed at, or is intended for distribution to, or use by, any person or entity in any jurisdiction (by virtue of nationality, place of residence, domicile or registered office) where publication, distribution or use of such information would be contrary to local law or regulation.
You must inform yourself about, and observe any such restrictions in your jurisdiction and by accessing this website you represent that you have done so. The information on this website is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof).
By accepting these Terms and Conditions, you hereby confirm that according to the applicable laws and regulations of the relevant jurisdiction (be it the jurisdiction of your nationality, residence, incorporation of the company you are representing or current physical location) you are allowed access this website.
Use of this website does not result in a contractual relationship between the user and ETC Issuance GmbH. To that extent, no contractual or quasi-contractual claims arise against ETC Issuance GmbH as a consequence of visiting this website.
No content of this website should be considered as an offer to purchase any product or securities as described on this website. The prices and valuations published on this website are indicative and are for information purposes only, as is other information displayed on this website. Any person making offer of securities described on this website shall observe and strictly comply with restrictions on the usage of information pursuant to these Terms and Conditions, as well as any restriction imposed by a prospectus published with respect of any securities described or applicable laws and regulation, including without limitation restrictions imposed by the EU Prospectus Regulation (REGULATION (EU) 2017/1129 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 June 2017).
Any securities described on this website are not permitted to be offered for sale in all countries and are in each case reserved for investors who are authorised to purchase the securities. Selling restrictions applicable to specific products are set out in the relevant prospectus and should be read carefully by investors. Any restrictions imposed by the relevant prospectus are in addition and without prejudice to any restriction or prohibition established by laws or regulations of any jurisdiction.
United States Persons and legal entities resident in the United States
Securities issued by ETC Issuance GmbH or its affiliates have not been registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act"). The Bonds are being offered outside the United States of America (the "United States" or "U.S.") in accordance with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
The information provided on this website is not directed to any United States person or legal entity or any state thereof, or any of its territories or possessions.
U.S. PERSONS (AS DEFINED IN REGULATION S) AND LEGAL ENTITIES RESIDENT IN THE UNITED STATES MAY NOT ENTER THIS WEBSITE.
Information from this website may not be distributed or redistributed into the United States or into any jurisdiction where it is not permitted.
Exclusion of liability for content
Some documents displayed on the website and its content are restricted to ”Professional Investors” only and are not intended for retail or private investors. By making use, opening, or downloading such documents, you agree that you are an “Institutional Investor” as defined here: https://www.handbook.fca.org.uk/handbook/COBS/3/5.html, and have read, understood and accepted the conditions.
Certain documents made available on this website may have been prepared and issued by persons other than ETC Issuance GmbH. This includes any prospectus and additional documents thereto. ETC Issuance GmbH is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, ETC Issuance GmbH shall not be responsible for any loss which is a direct or indirect result of reliance placed on any part of the website and it makes no warranty as to the accuracy of any information or content on the website. The terms and conditions of securities applicable to investors will be set out in the relevant prospectus, available on the website and should be read prior to making any investment.
You should always bear in mind that:
Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuers before investing.
Changes of terms and conditions of website use
ETC Issuance GmbH reserves the right to modify or amend these Terms and Conditions at any time without prior warning.
Content and design of this website are protected by copyright and other applicable laws. Any copying of the website or of its content requires the prior written consent of ETC Issuance GmbH.
Some of the hyperlinks contained on this website may lead the user to external websites that are not under the control of ETC Issuance GmbH and for the content of which ETC Issuance GmbH is not responsible. When the user clicks on such a link, the user will leave the ETC Issuance GmbH website. ETC Issuance GmbH is not responsible for the content of any websites reached by means of such a link.
Governing Law and Jurisdiction
ETC Issuance GmbH is a subsidiary of ETC Management Ltd, company number 12165332, with registered office at Gridiron, One Pancras Square, London, England, N1C 4AG. These Terms and Conditions and your access to and use of this website and the content are subject to the laws of England and Wales.