- Litecoin marks its tenth anniversary in 2021.
- Charlie Lee told us why LTC has spent nearly 10 years as a top-ranking cryptocurrency.
- In 2017, Litecoin spotlit the issue of what happens to a major crypto when a founder cashes out.
It’s a big year for spin-off . The cryptocurrency—often described as the silver to Bitcoin’s gold—celebrates its tenth anniversary in October.
Recently, Decrypt sat down with Litecoin’s founder Charlie Lee, an MIT graduate and Google veteran, to find out just what’s so great about the cryptocurrency he designed. We’ve boiled his answers down into nice handy facts.
1.1.In nine years, Litecoin had zero downtime
Bitcoin and Ethereum, the top two ranking cryptocurrencies by market cap, have both experienced downtime—but not Litecoin, according to Lee.
"Litecoin has been running nonstop for almost 10 years," Lee told Decrypt. "It's one of the few coins that can claim that. Even Bitcoin has had issues where there's been like a fork and a certain amount of downtime. Litecoin has not had any downtime since I launched it in October of 2011."
2.2. It’s been a top-10-ranking cryptocurrency ever since it was invented
It may have gone up and down in rank, but Litecoin has been in the top 10 cryptocurrencies by market cap for pretty much the whole time since it launched. It’s currently at number eight, between and . But Decentralized Finance () coins, such as Wrapped Bitcoin () and ’s governance token UNI, are rising fast.
"There's a lot of coins that have had their 15 minutes of fame but receded," said Lee."Litecoin has never really left the spotlight; it's quite impressive."
3.3. Litecoin’s mining algorithm gives it a security advantage
Litecoin uses a different mining algorithm to Bitcoin. This means that it can dominate the so-called "hashrate" of the algorithm it uses, which is called Scrypt.
That’s not an option available to Bitcoin Cash, for example; like Bitcoin, it uses the SHA-256 algorithm, but only has around 2% dominance, making it vulnerable to attack. In contrast, LTC’s Scrypt dominance is at around 99%, said Lee.
"There's no incentive for Litecoin miners to attack Litecoin because they're basically attacking their own, whereas for SHA-256 miners, if they attack Bitcoin Cash and Bitcoin Cash dies because of it, they don’t really lose much money at all, because they can go back [to mining Bitcoin]," he explained.
4.4. Litecoin has high liquidity
Litecoin is listed on every major cryptocurrency exchange. Like Bitcoin, it’s used as a store of value, but its super-low fees and faster transaction rate have boosted its popularity as means of exchange.
"Today, the market cap is $9 billion, but the volume is $8.5 million dollars. The trading volume exceeding the market cap is pretty impressive, so it's very liquid," said Lee.
5.5. It has more ATM support than any crypto, except Bitcoin
The latest data from CoinATM Radar puts the number of ATMs supporting Litecoin at 9,425, while almost 15,000 ATMs now offer . Reports last year suggested that LTC was set to be enabled in 13,000 ATMs in Korea, which would mean it has more support worldwide than even Bitcoin.
"There are a lot of places where you can buy and sell Litecoin, it’s the second-best supported [cryptocurrency,]" said Lee.
6.6. Litecoin is supported by PayPal
In October 2020, PayPal introduced support for Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, which means that its 350 million US customers can now buy and pay for goods and services in these cryptocurrencies.
"People chose to support Litecoin because it's a useful currency and it's one of the top currencies," said Lee.
Of course, not everyone in the crypto community is head-over-heels in love with . It's come in for criticism over its terms and conditions, which state that the crypto in your account "cannot be transferred to other accounts on or off PayPal." Still, though, it's opened the doors for some 26 million merchants to accept payments in cryptocurrency—including Litecoin.
7.7.Privacy features are coming to Litecoin
Litecoin is getting a major upgrade over the coming months to give it so-called "fungibility," where one coin is indistinguishable from another.
"This is what makes money powerful because every coin or any bill is the same—it's fungible. Currently, that's not the case with Litecoin and Bitcoin," said Lee. "There are stories you hear that people deposit some coins to Coinbase and their account gets banned, because the coins are linked to a dark market, for example," he explained.
MWEB, the opt-in privacy and fungibility feature being introduced, means the coins can’t be ‘tainted’ by what they’ve been used for in the past. It’s an optional feature and functions as a kind of sidechain. Lee believes it’s going to be a major selling point.
8.8. Almost 2% of LTC is locked up in the Grayscale Litecoin Trust
Digital asset manager Grayscale Investment made headlines when it announced a record $27.1 billion in assets under management last week. It’s one of the few ways institutional investors can get exposure to Bitcoin without having to hold the asset itself.
The has pulled in the bulk of the funds—and generated the majority of the headlines—but the asset manager also operates trusts for a small number of other cryptocurrencies, including Litecoin.
"The Grayscale Litecoin Trust is doing really well," said Lee, pointing out that $173 million LTC is currently locked in it—which represents almost 2% of all Litecoin in existence. "It’s hard to know what a complex demand there is on the institutional side for Litecoin, but looking at this, it’s pretty impressive."
9. Litecoin survived after Lee cashed out
Litecoin was perhaps the first major cryptocurrency to raise the thorny issue of what happens when a founder cashes out.
Lee sold his LTC at the end of 2017, near the peak of the cryptocurrency boom, citing conflict of interest and other reasons. He said that—even three years later—people still hate on him for selling out, and some even blame him for crashing the whole crypto market, which is "ridiculous," he insists.
"It's kind of human nature for that to happen; I should have expected it," he said ruefully. "A lot of people think I quit Litecoin because I have no incentives to work on anymore. But it's kind of the opposite because it's my baby, so to speak. It's my legacy."