What’s the biggest Proof of Work project after Bitcoin? Anyone know? It’s Litecoin. If you knew that I am sure you dont know this for sure. Litecoin is the backbone of Dogecoin. Surprised? So was I.
But for some reason, this altcoin just keeps flying under everyone’s radar. That’s despite no downtime in 11 years and working hard on achieving its goal as crypto’s top payments coin. So today, we take a look at almost forgotten Litecoin and 4 big reasons why YOU should NOT forget it for your portfolio.
Reason #1: Litecoin Halving Opportunity
By far, the biggest recent news on Litecoin is its halving, which took place just yesterday and no it didn’t pump altcoin. In fact, LTC dumped over let me see 4.5% in the last 24 hours.
Now that LTC halving has disappointed the holders, Bloomberg states that the upcoming Bitcoin halving might disappoint BTC holders. (kind of shrug it off). But I guess Bloomberg doesn’t know how Litecoin Halving’s price cycle works. I will explain that to you so that you can still make the most of this opportunity.
Litecoin Halving Cheat Sheet 🤫 pic.twitter.com/esNfUoGkcP
— Altcoin Daily (@AltcoinDailyio) July 29, 2023
I will get to the 3 reasons why LTC is the biggest crypto opportunity for those who are not very aware of Litcoin. Here is some background because many of us don’t know a lot about Litecoin. Here are some fast facts:
- It started as a fork from Bitcoin and it is a Proof of Work chain too.
- Its stated goal is payments.
- To achieve its goal, Litecoin has 4x as many coins as Bitcoin (84 million) and produces blocks 4x faster than Bitcoin (every 2.5 minutes).
- Its mining algorithm functions so miners can mine it and Bitcoin with the same hardware.
- It was originally marketed as the Silver to Bitcoin’s Gold.
So while there is a lot more we can say about Litecoin, that’s a good start to get an idea of what they are about. Now, onto the halving. Like Bitcoin will do next April, Litecoin has a block reward halving every 4 years. This means that the block reward that goes to the miner who solves the block is cut. In this case, it went down from 12.5 LTC to 6.25 LTC per block.
And like Bitcoin, miners provide the Proof of Work to keep things decentralized and secure. Halving events will keep taking place to keep Litecoin from becoming inflationary until the last halving event in 2139.
Bitcoin has over 90% of its coins mined already. Litecoin is close but slightly behind at ~87% at the time of the halving.
— IntoTheBlock (@intotheblock) August 2, 2023
Impact of the Litecoin Halving
Bitcoin, if you believe any of quant analyst Plan B’s work, operates on two 2-year cycles. The bull cycle starts before the halving and goes until 18 months after. Not so with Litecoin. Litecoin follows a distinct pattern from Bitcoin here. In the last 2 halvings, this is what happened, in order:
- A good run-up in the price BEFORE the halving
- Selling for a couple of months after the halving (most likely profit-taking)
- And then a HUGE run-up after the selling phase stops. This run-up is bigger than the first one.
For example, in the 2019 halving, the numbers worked out this way:
- Up 550%
- Down 70%
- Up 1500%
The same happened with even bigger numbers after the first halving in 2015. Like with Bitcoin, the Litecoin halving is a big deal and the network only gets stronger as a result. And what did Litecoin do immediately following the halving? Down 5.6% on the first day. Do you use Litecoin or any other Proof of Work chains besides Bitcoin? Let us know in the comments below.
The litecoin halving is done! pic.twitter.com/vUxluhdMN7
— Shan Belew Ⓜ️🕸 (@MASTERBTCLTC) August 2, 2023
Reason #2: Dogecoin and Litecoin Connection
I was surprised to know that Litecoin provides network security to Dogecoin via a process called “merged mining.
The story behind is something like this. The Dogecoin blockchain, originally created as a joke, was at risk of attack in 2014 because it was on the verge of exhausting block rewards due to a frenzied pace of currency issuance.
So Charlie Lee, creator of the Litecoin blockchain, stepped in and proposed a “merged mining” arrangement. Allowing Dogecoin to borrow Litecoin’s network security, ultimately rescuing the embattled cryptocurrency. So with all the Dogecoin Elon Musk bromance going on…you must definitely not miss Litecoin.
Enabling miners to process transactions, while providing an additional layer of security, to both decentralized networks. In the process, Dogecoin’s future was secured. pic.twitter.com/CaZPlrp23C
— Litecoin (@litecoin) August 3, 2023
Reason #3: Litecoin Hash Rate All-Time High
One of the key data points for Proof of Work cryptos is the hash rate. It tells us how much computing power is powering and protecting the network. And it might be natural to think after a halving when the reward goes down, that hash rate could decline too.
But that’s not what’s happened in previous halvings. More importantly, Litecoin’s hash rate hit an all-time high on July 31st, 2023, of 816 Terrahashes per day. That’s A LOT of computing power. Only BCH and Bitcoin have more power to protect their networks.
So Litecoin’s network is healthy and growing. All things we look at when considering tokens for investment.
Reason #4: The SEC Effect
Don’t let this recent news that Coinbase was asked to delist every token but Bitcoin before the SEC filed suit fool you. And as good as it is for the industry, don’t let the XRP decision fool you either. The asset with the most clarity from the SEC about it NOT being a security is Bitcoin.
The 2 assets with the most clarity after that with clear evidence they are not securities are the 2 big Bitcoin fork coins: Litecoin and Bitcoin Cash. There’s a reason why in the early days of crypto exchanges like Coinbase, Kraken, Gemini, and Paxos ItBit they only offered 5 or 6 coins.
They were wary about whether other tokens, especially ones that did ICOs like Ethereum, or ones that did big private community sales like Solana or Cosmos are securities or not. And from the beginning, even when they could only offer a handful of coins safely, 3 of them were always Bitcoin, Litecoin, and Bitcoin Cash.
Wow, some unbelievably bad takes in the replies.
Any argument the SEC can use to say Litecoin or BCH is a security can be used to claim Bitcoin is a security.
Imagine being so blindly tribal that you want mother government to restrict open source, fair launch coins in a manner… https://t.co/sB6xRtRgZZ
— Bruce Fenton (@brucefenton) July 31, 2023
In other words, this crackdown, or whatever it is by the SEC, could end up being good for this altcoin. It has faster and cheaper transactions than Bitcoin does, making it an ideal coin to use as the swapping mechanism between the coins Americans can buy, and the ones they really want.
Demand could grow to hold onto LTC too. After all, as I talked about earlier, the hash rate is at an all-time high. And hash rate always precedes price. It means the network is healthy and miners are staying around even for lower block rewards.
Just because this altcoin is the #12 value project by market cap doesn’t mean we know everything about it. In fact, out of the top 15 projects, it’s probably the least reported one in crypto media. It just quietly does its thing while maintaining and growing its $6.3 billion market cap. And it should grow from here.
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