$2.2 Billion and Climbing: How Litecoin Surged 10% Overnight to Become the 4th Largest Cryptocurrency
Litecoin is now the fourth-biggest cryptocurrency by value overall, behind Bitcoin, Ripple and Ethereum. | Source: Shutterstock
Litecoin (LTC) has increased by more than 10 percent in value in the past 3 hours from $33 to $38, becoming the 4th largest currency in the global crypto market.
EOS, which secured its position as the 4th most valuable cryptocurrency behind Bitcoin, Ripple, and Ethereum since 2018, was surpassed by Litecoin.
The abrupt increase in the value of Litecoin comes in a period during which its open-source developer community has made significant progress in implementing scaling and privacy solutions such as Confidential Transactions and Mimblewimble.
Why Developer Activity Has Been Key: Indicator of Crypto Growth
Since early January, Litecoin developers have been focusing on the implementation of Confidential Transactions and Mimblewimble, solutions initially developed for the Bitcoin blockchain network in July 2016.
The similarity in the structure of Litecoin and Bitcoin has allowed Litecoin developers to experiment with the two solutions in a relatively short period of time.
Charlie Lee, the creator of Litecoin, said last month that the Litecoin community is dedicated to complete the implementation of Confidential Transactions by the end of 2019.
“Litecoin dev team spent hours discussing how to add Confidential Transactions. The way to do a softfork CT is very similar to doing extension blocks and extension blk may be simpler and can do a lot more,” Lee said.
Confidential Transactions and Mimblewimble are privacy-focused features that enable users to send and receive payments without revealing their identities.
Because transactions are processed with fewer data to protect the identities of users and addresses, Confidential Transactions and Mimblewimble transactions are smaller by nature, improving the transaction capacity of the Litecoin network as well as privacy.
Already, within less than two weeks since Lee and the rest of the Litecoin developer community announced their plans to finalize Confidential Transactions implementation by the year’s end, the community has started to work on Mimblewimble.
A Litecoin column read:
We have started exploration towards adding privacy and fungibility to Litecoin by allowing on-chain conversion of regular LTC into a Mimblewimble variant of LTC and vice versa. Upon such conversion, it will be possible to transact with Mimblewimble LTC in complete confidentiality
It is our joint intention to publish any and all the work done as part of the project under a permissive open source license to let the community benefit from it.”
The increase in developer activity in the Litecoin community has been key to the success of the short-term price trend of LTC.
In mid-2017, Ivey Business School professor JP Vergne discovered in a study that the best indicator of the price trend of crypto assets is the developer activity surrounding the blockchain on which the asset is based.
As the crypto sector experienced the worst bear market in its history since January 2018, due to various factors including funding crunch for startups and teams, the developer activity of many blockchain projects has noticeably declined.
Meltem Demirors, an executive at CoinShares, wrote in a report released in November:
On the issuer side, many crypto projects that raised money through an ICO face massive challenges to stay relevant and create real purpose. This is what happens when you lack a true finance function, and unfortunately, ‘crypto finance’ is still nebulous and undefined on the whole.
But, major crypto assets such as Bitcoin, Ethereum, and Litecoin have continued to demonstrate progress in development in many areas including scaling, privacy, and fungibility, establishing foundations for the next wave of users and decentralized applications (DApps).
Can Litecoin Sustain This Momentum?
On February 3, one cryptocurrency technical analyst with an online alias “Moon Overlord” suggested that the price of LTC could recover to $50 in a relatively short time frame.
https://twitter.com/MoonOverlord/status/1092137649563947009
Given that both technical and fundamental indicators remain strong for the major cryptocurrency, analysts expect the asset to sustain its momentum in the short-term.
Click here for a real-time Litecoin price chart.
Featured Image from Shutterstock. Price Charts from TradingView .
