Why Has Litecoin’s Price Increased So Much? (Deep Fundamental Analysis)

Image result for litecoin wallpaper

If you’ve asked this question, then hats off to you, because it should be asked.

As noted in the most recent price analysis, Litecoin’s price has increased by 140%+.

Picture above has shit quality for some God-forsaken reason.

Reason #1 — Marketing

This is the primary (and perhaps the only) reason why Litecoin has soared in value as much as it has recently.

Remember all of the marketing that Litecoin used to do back in 2017?

(Yes, they were paid promoters — of course)

Yeah, even Charlie Lee managed to step out in public during the 2017 boom.

After the numerous debacles that Charlie Lee (among others) found themselves in, in 2018, the team completely toned down their marketing.

LitecoinDad and LitecoinQueen engaged in warfare, with the latter being suspended from Twitter and Charlie Lee went all but mum, minus the occasional ponzi scheme/scam promotion (cough LitePay cough).

But, now, it appears that…

The Marketing Machine is Back in Operation

Starting in late 2018 (and I mean late, like December 2018), Litecoin started making a frenzied marketing push in the community.

Litecoin Takes to the UFC Octagon in New Sponsorship Deal – CoinDesk

The Litecoin Foundation has partnered with Ultimate Fighting Championship (UFC), one of the leading mixed martial arts organizations, in a deal to promote the cryptocurrency. The deal will see the litecoin logo displayed on the octagonal fighting canvas at an upcoming event called UFC 232 – a rematch between former UFC light heavyweight champion Jon Jones and light heavyweight Alexander Gustafsson.

 

It didn’t stop with the UFC deal, though. They managed to get noted (extremely controversial and widely criticized) YouTuber, Logan Paul on board with the campaign as well:

johnkimofficial.com ⚡️Chief LTC Evangelist on Twitter

Met @LoganPaul at the @MammothFF The dude took over YouTube and social media and is a hell of a boxer. My #litecoin is on Logan on the rematch. #respect his passion. Apparently he likes #litecoin @LTCFoundation @SatoshiLite @DaddyCool1991 @Benaskren @cryptolili @cryptorecruitr https://t.co/9azhFcrNWo

 

johnkimofficial.com ⚡️Chief LTC Evangelist on Twitter

Yo I heard Litecoin is pretty cool, that’s the word on the street that’s a fact – @LoganPaul #IgnitetheFireLTC https://t.co/4j9jXexkbI

 

 

Its unknown why Litecoin sought out Logan Paul since Logan Paul himself is on record as stating that his channel specifically targets the child audience and neither he, his brand, nor his affiliations have anything to do with cryptocurrency or even technology in general… but no matter! The partnership is in existence, nonetheless.

Logan Paul wishes his fans were older. They’re not.

Logan Paul has a legion of young fans, but he’d prefer it if they were older. The disgraced vlogger has entered the morning show phase of his apology tour, and it’s revealing a lot about how he views himself. Paul sat down with Michael Strahan on Thursday’s Good Morning America.

 

 

Charlie Lee is Back to Promoting Ponzis/Scams on His Page Again

It appears that Charlie Lee is taking notes from the Justin Sun/CZ marketing playbook by appealing to the absolute lowest common denominator of buyer (i.e., the prototypical ‘moon boy’).

Source: https://twitter.com/SatoshiLite

 

What is ‘BlockFi’?

The picture below should tell you all you need to know about this service:

Since this is a review of Litecoin’s marketing (and not BitFi), we’ll leave that alone for the time being. Don’t worry, we’ll circle back around to that in due time.

Note the ‘6% annual interest compounded monthly’ in the bottom corner.

Above is a picture from Bitconnect. Note the uncanny similarities.

 

Reason #2 — “Confidential Transactions”

Another (potential; yet unlikely — there are moonboys out there) reason for the rise in Litecoin’s price could be this tweet that Charlie Lee made in the beginning of the year (Jan. 28th, 2019, to be exact):

Charlie Lee [LTC⚡] on Twitter

Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy. I am now focused on making Litecoin more fungible by adding Confidential Transactions. 🚀

 

Before we dissect this, let’s answer a few questions, first.

What is ‘Fungibility’?

A good example of a fungible asset would be a dollar bill (USD; but this applies almost universally to paper currency).

A dollar bill is a dollar bill is a dollar bill. Nobody cares about what specific dollar bill that you have in your possession. The dollar bill in your pocket buys you just as much as the dollar bill in anyone else’s pocket.

Simple enough.

Why isn’t Litecoin Fungible?

Because Litecoin is based on Bitcoin’s code (for the most part), and Bitcoin is not fungible. While the general community may treat Bitcoins like they are fungible, the protocol does not.

Each ‘satoshi’ (smallest unit of a Bitcoin; 0.00000001 $BTC) is unique in the protocol. The reason for this is to preserve the integrity of the ledger, allow the protocol to recognize double spending, etc., and so forth.

Thus, Bitcoin and Litecoin are not fungible in a literal sense even though they are treated as such.

So Why Does Charlie Lee Want Litecoin to Have Fungibility?

Again, another really good question.

There are a few reasons why some people argue that the protocol should be made fungible:

  1. ‘Dirty bitcoins’ (ones that have been involved in crime), are sometimes tracked through the blockchain and, at times, these searches result in the positive identification of a holder of these bitcoins that actually had nothing to do with what has made these bitcoins ‘dirty’.
  2. Bitcoin’s (Litecoin) non-fungible nature is one of the things that makes the protocol so public. Adding fungibility to the Litecoin protocol will make any privacy enhancing implementations significantly easier.

So, now that leads us to the next major question.

What are ‘Confidential Transactions’?

If you’ve already guessed it by now, you’re probably right.

Basically this would be ‘private transactions’ on the protocol. Charlie Lee has stated before that this would be implemented on the protocol sometime in 2019 (hasn’t given a specific date yet at this point).

In an interview with CryptoInsider, Charlie Lee stated:

Having something like confidential transactions will get us closer to good privacy and good fungibility, and that is something that I am currently thinking about exploring for Litecoin.”

 

 

There is no documentation yet on these ‘Confidential Transactions’, so the idea, its security or viability on the protocol cannot be assessed yet at this point in time.

Charlie Lee Has Been Hinting at Adding Privacy on Litecoin for a While

For those that do not remember, Riccardo Spagni (Monero) affirmed publicly that he and Charlie Lee were seriously considering a ‘merger’ between Monero and Litecoin:

Riccardo Spagni on Twitter

Such a productive few days, finally got to sit down with @SatoshiLite and talk about a possible merger between the Litecoin Enterprise Alliance and the Monero Enterprise Alliance, which we’d obviously call the LAMEA. #blessed #justblockchainthings

 

The above tweet was sent in late January 2018. This, of course, never came to fruition and it appears that Charlie Lee’s ‘Confidential Transactions’ announcement is a strong hint that this merger will never happen. However, nothing can be ruled out.

Perhaps Charlie Lee plans on implementing ‘Confidential Transactions’ via said merger.

Why Would ‘Confidential Transactions’ Be a Big Deal?

On a literal, day-to-day level, this probably makes little difference for Litecoin.

However, the crypto community (and media publications in it) will frame this as a HUGE advance for Litecoin that fundamentally changes it as a coin and makes it a rightful ‘silver’ to Bitcoin’s ‘gold’ (as Charlie Lee loves to say in every single interview ever) or perhaps even a replacement to Bitcoin itself (because why put a ceiling on hyperbole?).

Reason #3 — Bitcoin Cash, Ripple, EOS, and Stellar Shit the Bed

This reason will more than likely offend the dedicated and loyal ̶c̶u̶l̶t̶ crypto-followers of these projects, but each one has shit the bed in various ways — which has essentially cleared the path for Litecoin.

  1. Bitcoin Cash — The debacle between Craig Wright + Calvin Ayre vs. Roger Ver + Bitmain + Bitcoin ABC seriously hurt the Bitcoin Cash community. It gave critics of the project (which are already numerous) a valid reason to criticize the project. It certainly did not help that certain parties (cough Craig Wright cough) stated that they had coffers filled with billions of dollars that they would deploy on their mining operations to ensure that the Bitcoin SV variant of Bitcoin Cash would reign supreme, thus ‘reorganizing’ the chain (this didn’t end up happening). As stated before, this not only hurt the community’s (already fairly weak) public image considerably, it also weakened the community, by splintering it into two factions (Bitcoin SV vs. Bitcoin ABC). Of course, both factions are still reviled by Bitcoin and Litecoin lovers alike. For some reason, many in the Bitcoin Cash/SV communities seem to be entirely unaware of how this in-fighting has impacted their communities (or perhaps they are unwilling to accept that it has).
  2. Stellar Lumens — $XLM hasn’t necessarily been embroiled in controversy like the other coins that were mentioned above, but its price action has been absolutely dismal since the last major crypto market crash in November ’18. Since Stellar’s massive drop in market value, it has failed to produce any noteworthy buzz, making it nearly forgotten at this point in time (does the team need a new marketing director??).
  3. EOS — Another project that’s on fire. If you remember, Zerononcense published a very thorough, cogent piece on why $EOS is in **serious trouble**and how its viability is in question as well. Essentially, collusion among the top block producers for $EOS was established and proven (thoroughly). In addition, Daniel Larimer announced publicly that he was all but stepping away from the project entirely (just a year after it went ‘live’). Recently, there was a major ‘hack’ on the protocol as well (blockchain should never be getting hacked), and numerous critics have provided thorough, in-depth research on why its bandwidth model more than likely will not work.
  4. Ripple/XRP — This project is not necessarily ‘on fire’, per se, but it has come heavily under fire over the last few months. If you’re wondering why, look no further than the >51% attack that $ETC became a victim of a few months ago. Shortly after the news of this >51% attack broke, many in the Ripple/XRP community began championing the Ripple protocol as the supreme alternative to PoW-consensus based blockchains because, after all (they argued), ‘Ripple cannot be hacked’. Specifically, the Ripple community was asserting that this was a reason for why Ripple possesses superiority > Bitcoin. Of course, the Bitcoin community did not take kindly to these claims of superiority, and soon went on the offensive, themselves. The only issue for Ripple is that the protocol has already been on the defense against claims that it is a security/elaborate hustle by Brad Garlinghouse / “Bank Coin” etc. So, this narrative that has been antagonistic toward Ripple has multiplied. Notable individuals in the cryptocurrency community such as Ryan Selkis and Frances Coppola have made hard-hitting statements against Ripple in the past.

While all the above drama and chaos has afflicted the aforementioned projects, Litecoin has sat quietly in the background — avoiding any and all drama.

Sure, the oft-stated axiom, “Charlie Lee sold at the top!” is still chanted from time to time, but those chants are beginning to grow weaker. And besides, that’s old news — especially in a space where a new fraud/scam gets uncovered everyday. Plus, objectively speaking, Charlie Lee selling at the ‘top’ is hardly the worse thing that we’ve found out about the crypto community in the last year or so. So, Litecoin has been able to wisely stay in the background while other projects have received the majority of the community’s (negative) attention.

Conclusion

With Litecoin now back in the ‘spotlight’ in the community, it remains to be seen how they will handle it.

Last time they were there, it didn’t really end so well. However, what Litecoin has going for it is that it does not necessarily have the Bitcoin community against it (although its hard to say that the community is necessarily ‘for’ Litecoin either).

The major issue for Litecoin has been that there are few that take it seriously as an independent project. The greatest criticism for this project has been that it is merely a clone of Bitcoin that brings nothing to new to the table and… for all intents and purposes, this isn’t really inaccurate. Apart from a different mining algo (which is supposed to be ASIC-resistant, but ASICs still mine Litecoin), shorter block time (2.5 minutes), slightly modified block reward, different ‘halvening’ date, and total circulating currency (84 million vs. 21 million for Bitcoin) , there is little that is fundamentally different about Litecoin.

Given that fact, the idea of ‘Confidential Transactions’ is something that Litecoin holders should be reasonably bullish about. While it remains to be seen how it will be implemented (and how effective it will be), if it is successful (unknown % chance of that), then Litecoin will be able to effectively defeat the argument that it is ‘no different’ than Bitcoin or simply a ‘Bitcoin knock off’ / ‘little brother’ etc.

Charlie Lee Needs to Limit His Social Media and Public Activity

It sucks to say it, but its true. Charlie Lee’s public statements, social media presence, and behaviors are what have effectively undermined the project in the past.

It appears that now Charlie Lee is in the company of ‘John Kim’ (appears to be their new marketer), so perhaps he is receiving some badly-needed coaching. But even with that, Charlie Lee is still blowing it by retweeting a promotion of ‘BlockFi’.

It just seems that there is a more ‘tactful’ way for Charlie Lee to promote and endorse Litecoin without doing so at the expense of the coin’s public image.

Perhaps not.

 

 

One comment on “Why Has Litecoin’s Price Increased So Much? (Deep Fundamental Analysis)

  1. Maybe I am misunderstanding the part about fungibility but aren’t dollar bills also accounted for? They do have serial numbers and you are theoretically not allowed to do any major damage to them – or take them out of the money supply. I’d assume that there is no real difference between Litecoin’s fungibility and that of a USD except for the fact that the technology would (or should) make you aware of an inconsistency right away?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.