Often dubbed as ‘silver to bitcoin’s gold’, Litecoin has been around for around six years. While Litecoin is broadly built on a structure similar to Bitcoin's, it has a faster block generation rate and hence offers a faster transaction confirmation. While it witnessed a lifetime high of $50 in November 2013, it hasn't seen much activity in the past two years or so with its price hovering around $2-$5 range. However, the recent movement in its price has got cryptocurrency enthusiasts to take a second look at it?
Litecoin was created by Charlie Lee, a MIT graduate and former Google engineer. Litecoin is based on an open source global payment network that is not controlled by any central authority and uses "scrypt" as a proof of work, which can be decoded with the help of CPUs of consumer grade. Its price has risen from approximately $4 to $13 during the past one month.
The main reason behind the recent rally has been the rising support towards adopting Segregated Witness, or simply SegWit. Litecoin like Bitcoin has a block capacity of one megabyte (MB) that limits the transactions per block. As the network grows, this tends to slow down the confirmation of transactions. SegWit is thus a ‘scaling’ mechanism originally developed for bitcoin. The adoption of SegWit requires a network consensus which has hindered its upgrade in case of bitcoin. However, Litecoin is getting closer to SegWit upgrade amid growing consensus. SegWit activation threshold is at 75%. This is a positive development for Litecoin and a successful upgrade could possibility trigger the same for Bitcoin which currently has just about 33% pool support for SegWit. There are a couple of Litecoin Segregated Witness adoption trackers which show the adoption progress.
Charlie Lee has been advocating for SegWit to activate on Litecoin as well as Bitcoin, he says, “Litecoin does not have a block size problem. That’s right, and SegWit is not just a block scaling solution. I would even say block scaling is just a side benefit of SegWit. The main fix is transaction malleability, which would allow Lightning Networks (LN) to be built on top of Litecoin. And there are a bunch nicer features of SegWit.”
Amid Bitcoin’s scaling debate, the possibility of Litecoin upgrade portrays a positive picture for its price, and usability. In fact, the increase in the latter would possibility make the price rally more sustainable for Litecoin. Litecoin is currently ranks fourth among the 700 plus cryptocurrencies with a market capitalization of $687.31 million. (Related reading, see more: The 6 Most Important Cryptocurrencies Other Than Bitcoin)