The Calm Before Litecoin’s Storm
In case you haven’t heard, Litecoin is the unofficial test net for Segregated Witness, a revolutionary upgrade that will make for faster payments and enable the Litecoin network to be ready for mainstream adoption.
Litecoin is a hard fork of Bitcoin. It can do everything Bitcoin can do, but it’s faster, more economically-friendly, and it has a maximum supply of 84 million coins, compared to Bitcoin’s 21 million.
Mainstream adoption is something every cryptocurrency hopes and dreams for. It has become a very hot topic for Litecoin’s bigger brother Bitcoin, which has caused the Bitcoin community to reach a stalemate in regards to which direction the cryptocurrency will go.
The Bitcoin community is very divided over Segregated Witness, which is also known as “SegWit” in the crypto community. Some believe it is the only way Bitcoin can scale for global usage, while others believe the new software upgrade will centralize Bitcoin and want to seek other alternatives for scaling to global levels.
SegWit needs 95% of the miners of the respective cryptocurrency to upgrade to it for it to be enabled, similar to a voting system.
Bitcoin currently has around 25% out of the 95% needed for official adoption towards SegWit.
Is it Better to Test on Litecoin Than Bitcoin?
The plans for Litecoin adopting SegWit came with a mixed response, but a positive reaction overall.
Charlie Lee, the creator of Litecoin, who is also a Bitcoin fan, has said (sort of) that if there are any problems with Segregated Witness that no one has foreseen or discovered, it would be better that the problems are found with Litecoin as the test net, rather than Bitcoin.
As of today, Bitcoin is worth around $920, while Litecoin is $3.80.
The risk in anything going wrong with Bitcoin is much higher than Litecoin, as the price clearly shows and as Charlie Lee explains in the Reddit forum!
How Will This Benefit Litecoin?
With Bitcoin being the dominant digital currency for the foreseeable future, Litecoin’s only unique selling point over it is the faster speed of transactions and more electricity-friendly mining.
If Litecoin adopts SegWit before Bitcoin, it will give it a huge selling point over its bigger brother, as it will mean Litecoin is ready for global mainstream usage. While Bitcoin is still deciding what to do, Litecoin will be able to do something meaningful that Bitcoin cannot.
What Could Happen to Litecoin’s Price?
If the process goes well, then Litecoin could potentially gain a much higher price, as capital would flow in from all areas in fiat and digital alike. The fact that Litecoin would be ready for global adoption would, at the very least, make heads turn.
Many “experts” (I use the term loosely) believe Litecoin will adopt SegWit much sooner than Bitcoin’s slow progress and cause a huge Litecoin price surge!
I’m a fan of both Bitcoin and Litecoin. I see them as the most legitimate digital currencies, but this would take away Bitcoin’s thunder, in my opinion. It could even create a upward correction in Litecoin and Bitcoin’s price ratio in Litecoin’s favour.
What if it Goes Wrong?
All potential possibilities aside, there is an element of risk to this upgrade. Litecoin’s market capital is around $235,051,377. This makes it number four in the cryptocurrency industry.
This is still a huge amount of capital, and Litecoin could suffer badly if the implementation goes wrong. There are also still many in the Litecoin community that disagree with SegWit because of centralization issues with the software and regarding who controls the software.
There could be loopholes in the code or bugs that developers haven’t foreseen. Although unlikely, there is always a possibility. If there are any problems, the Litecoin community will react fast and correct the problem, as Litecoin’s community isn’t as divided as Bitcoin’s community.
The Bigger Picture
The future for Litecoin looks bright. There are huge amounts of interest in what will happen when/if Litecoin adopts SegWit. The community, in my opinion, is more curious than sceptical about the possible outcomes. Like Charlie Lee said, if Litecoin becomes the test net, the risk is much lower than Bitcoin’s in a worst-case scenario.
2017 is going to be an interesting year for Litecoin and many other currencies. If SegWit goes live on the Litecoin network, the title of being “Bitcoin’s silver” will be truly earned. Litecoin may officially become the first globally mainstream-ready cryptocurrency and force other cryptocurrencies into adopting such methods to handle mainstream usage.
Bitcoin’s community, which includes a lot of the same people as Litecoin’s community, will be watching closely. This could be what Bitcoin needs in order to resolve the scaling issue.
Litecoin, which is often referred to as “boring” and having no usage, is now pioneering into uncharted waters, and it just may become something much more for the long-term!