David Schwartz Interview On Why Litecoin is Digital Silver
In 2024, Bitcoin continued to dominate headlines, with its lesser-known counterpart, Litecoin, quietly continuing to reaffirm its position as “digital silver.”
To understand Litecoin’s unique role in the cryptocurrency industry, CCN spoke with David Schwartz, Director of Strategic Partnerships at the Litecoin Foundation. During this discussion, Schwartz shared his story, Litecoin’s core advantages, and future prospects.
Schwartz’s Path to Litecoin
Schwartz entered the cryptocurrency space in 2017 after purchasing Bitcoin (BTC). Initially, Litecoin (LTC) didn’t grab his attention, but deeper research changed his perspective when he mentioned that he “thought the concept was very interesting… Speedier transaction times, cheaper fees, and a supportive community made it stand out.”
Schwartz explained hwo Bitcoin, which often prioritizes long-term capital preservation, Litecoin was designed for speed, affordability, and utility, making it a practical tool for everyday transactions. Schwartz’s fascination with Litecoin led him to volunteer at the Litecoin Foundation in 2018, eventually joining as Director of Strategic Partnerships. One of his earliest accomplishments was helping organize the first Litecoin Summit in San Francisco that same year.
Why Litecoin is ‘Digital Silver’
The comparison between Bitcoin and Litecoin often mimics gold and silver. Bitcoin, as “digital gold,” serves as a store of value, while Litecoin plays the role of “digital silver,” facilitating transactions. Schwartz explained the historical logic behind this comparison by explaining that “historically, gold was used for hoarding value, and silver was used for everyday exchanges. Litecoin mirrors this dynamic. It’s valuable but more accessible.”
Litecoin’s faster block times (2.5 minutes compared to Bitcoin’s 10 minutes) and lower fees make it ideal for payments, aligning it with its “digital silver” identity. This practicality has cemented its reputation as one of the most-used cryptocurrencies for transactions.
What Sets Litecoin Apart
Litecoin continues to distinguish itself through innovations that increase privacy, expand its ecosystem, and promote energy efficiency. Schwartz highlighted the below key features during this interview:
Enhanced Privacy with MimbleWimble
Litecoin’s MimbleWimble Extension Blocks (MWEB) provide optional privacy for users, enabling confidential transactions without compromising the integrity of the blockchain. Schwartz explained the significance of this feature, explaining how “with MWEB, users can take Litecoin, put it into an MWeb address, and people cannot see the totals or the amounts being sent. It can always be brought back over to the main chain.”
This functionality makes Litecoin particularly appealing to businesses and individuals valuing financial privacy. Schwartz emphasized that “it’s a big deal… larger wallets incorporating this feature will make a significant difference in adoption.”
Integration with Decentralized Finance (DeFi)
Through a partnership with CoinUT, Litecoin introduced Wrapped Litecoin (wLTC), which extends its usability into the booming DeFi ecosystem. This allows Litecoin holders to engage in activities such as lending, staking, and liquidity provision, previously unavailable to them. Schwartz shared that “wrapped Litecoin allows people to take their Litecoin and start using it within the DeFi space, which is something we’ve been left out of for the large part in the last few years.”
This integration opens up opportunities for Litecoin to participate in blockchain-based financial services, expanding its utility beyond payments.
Energy Efficiency and Environmental Edge
Litecoin’s use of the Scrypt algorithm makes it significantly less energy-intensive compared to Bitcoin’s SHA-256. This difference in algorithm design reduces the computational power required for mining and positions Litecoin as a more environmentally sustainable option. Schwartz pointed out that “Litecoin doesn’t use as much electricity to begin with. It’s still more profitable than mining Bitcoin at the moment.
Schwartz highlighted that “Scrypt is not as energy-intensive. It’s more memory-intensive, which gives it a slight edge when looking at sustainability.”
The chart above illustrates how Litecoin mining can be more profitable than Bitcoin mining primarily due to Litecoin’s lower computational requirements and reduced competition. Litecoin mining is accessible to a wider range of miners, including those with less expensive hardware like GPUs, rather than requiring specialized ASIC rigs. Additionally, Litecoin’s faster block generation time (2.5 minutes versus Bitcoin’s 10 minutes) allows miners to earn rewards more frequently, providing a steadier revenue stream.
Challenges Facing Litecoin
Despite its strengths, Litecoin faces hurdles, particularly in market perception and visibility:
Market Valuation Gap
The Bitcoin-to-Litecoin ratio hovers around 950:1, which some view as undervaluing Litecoin’s utility. Schwartz attributes this disparity to short-term factors like miner sell-offs and market speculation. Schwartz explains that “the disparity isn’t a long-term indicator of Litecoin’s value. It reflects market psychology and external factors like miners converting Litecoin to Dogecoin for profit.”
Schwartz noted that Litecoin struggles with visibility compared to trendier cryptocurrencies and as a result he has explained how “breaking through crypto and non-crypto media is tough without significant marketing budgets. SEO and social media efforts only go so far.”
Schwartz Explains That ‘A Litecoin ETF is not a Matter Of If, But When’
Litecoin has seen steady adoption in real-world use cases, particularly as a payment method. Schwartz emphasized that “Litecoin is the most-used cryptocurrency for payments today… It’s psychologically easier to spend Litecoin than Bitcoin, which aligns with its role as a transactional currency.”
One major development on the horizon is a potential Litecoin ETF (Exchange-Traded Fund). Such a fund could legitimize Litecoin further, attract institutional investors, and strengthen its value. Scwartz explains that “An ETF is not a matter of if, but when. Approval could catalyze a broader recognition of Litecoin’s utility.”
Mining and Network Growth
Litecoin’s mining activity is at an all-time high, signaling strong miner interest despite challenges like immediate sell-offs. Schwartz highlighted the longevity of Litecoin’s blockchain saying that “Litecoin has been around for over 13 years, and all key metrics user addresses, transaction volume, and miner activity are growing exponentially.”
Schwarz Confirms ‘There’s No Other Coin That Was Built As Complementary to Bitcoin as Litecoin, and There Never Will Be’
Litecoin is uniquely positioned to grow as cryptocurrency adoption accelerates. According to Schwartz, Litecoin’s simplicity and synergy with Bitcoin’s core principles are key factors in its longevity explaining how “Litecoin complements Bitcoin rather than competes with it. It’s built to support Bitcoin’s proposition while being practical for everyday use.”
This alignment allows Litecoin to serve as a transactional currency while reinforcing Bitcoin’s role as a store of value. Unlike newer cryptocurrencies that often rely on speculative hype, Litecoin benefits from a proven track record and a strong, loyal community.
Schwartz highlighted the potential for Litecoin to close the valuation gap with Bitcoin, which presents an opportunity for late adopters of digital gold to gain value through Litecoin’s role as digital silver. Schwarz highlighted that “there’s no other coin that was built as complementary to Bitcoin as Litecoin, and there never will be.”
As the crypto market matures, users are likely to prioritize proof-of-work coins and coins with utility and sustainability over novelty. Litecoin’s role as a reliable, accessible, and practical cryptocurrency ensures it will remain relevant in the digital financial ecosystem for years to come.
