Litecoin to Lose Steam as Lightning Network Gains Traction?
A payment gateway for blockchain payments has launched the processing of Lightning Network payments on Litecoin network. The news from CoinGate comes in the wake of claims raised that more Litecoin in existence are getting concentrated in fewer hands. Published figures show that the top 1000 Litecoin wallets have about 63.08% (37,916,185 LTC) of total supply. Though not unique to Litecoin, the development now questions whether the current distribution would not affect Litecoin’s growth in the future. While the launch of LN payments has been applauded, it has also helped raised another major question.
Won’t Litecoin likely lose its steam especially to Bitcoin since its raison d’etre is to be used for quick small transactions with low fees and LN is now taking up the role? Though the price of Litecoin surged slightly following the CoinGate news, the question arose from increasing reports that the exchange of Bitcoin with LN is increasing and the process is cheaper and faster. According to the payment gateway, when the pilot test with merchants ends sometimes at the end of February, Litecoin’s LN will be available to its 4,500 merchants.
Given that Bitcoin Lightning is fast and cheap, I really don't get the point (use case) for Litecoin Lightning. What am I missing? Save a couple pennies when opening a channel?
— Brad Baker ?️?️ (@fluidvoice) January 18, 2019
LN is expected to enable instantaneous transactions, micro/nano transactions and atomic swaps all with low fees. It is suitable for transactions that would not be stored on-chain forever like being used for buying coffee. Its use on Bitcoin also discounts the cost of transacting value which could make cryptocurrency gain superiority over PayPal and Visa, for example, as a means of payment. There are suggestions that the use of LN for in-game purchases and webcams will boost its adoption.
wasn't the whole point of LTC to be a quick small transaction with low fees. Isn't using LN just admitting you failed and people should just use Bitcoin?
— NINK (@NINK) January 18, 2019
An outlook could be viewed from various perspectives. LN will make transactions scalable. However, with Bitcoin network likely to get congested and a limited blocksize in the event of wider use, Litecoin would be handy to complement Bitcoin by acting as a means of exchange itself. Litecoin has earned the trust of the community having been around as long as Bitcoin without any problem.
Several LN-related developments are also being recorded for Bitcoin. According to data from p2sh.info, its LN mainnet had reached about 575 BTC at the time of this writing. Coin Center this week demonstrated Bitcoin’s LN transactions in the U.S. Congress for the first time ever.
I love how he acts suprised that it even worked!
— Mola Ram (@kingmr012) January 18, 2019
However, the argument still remains that if each satoshi of a Bitcoin – as the smallest unit of the currency – becomes quite expensive to own despite the rising global population, there may not be any need to use any other cryptocurrency – especially Litecoin. This is hinged on the fact LN is a part of the solution to position Bitcoin to contend with fiat as a medium of exchange albeit with a grown user base that has better ease of use interface.
Olusegun Ogundeji writes on tech-related issues including from the crypto/Blockchain space.
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