September 22, 2021 |James Messi
Since the onset of the COVID-19 pandemic, the surge in the number of people getting into the cryptocurrency sector has continually increased. As the number of participants increased, so did the popularity of all things crypto. Because of the influx of new investors jumping into the crypto industry, it has become even more important that various cryptocurrency platforms become more innovative; these platforms need to adapt to an ever-changing market.
To this end, the cryptocurrency network, Litecoin has expanded its protocol to allow users to create not only decentralized tokens and smart contracts, but also non-fungible tokens (NFTs) and stablecoins.
Litecoin announced this move as they unveiled OmniLite, the latest development in the digital currency’s platform.
To better understand this, let us first discuss what Litecoin is and what exactly is the significance of the development of OmniLite.
What Is Litecoin?
As mentioned earlier, Litecoin is a digital currency and one of the world’s first altcoins. It is modeled after the world’s top cryptocurrency, Bitcoin. Created in 2011 based on Bitcoin’s original source code, Litecoin has been dubbed “the silver to Bitcoin’s gold.” Litecoin has been envisioned by its creator Charlie Lee as a cheaper and more efficient alternative to Bitcoin for everyday use.
Compared to Bitcoin, (the primary use of which is as a storage of value), Litecoin boasts a faster and cheaper transaction speed, a faster mining process, and a much higher supply of coins—a total of 84 million coins compared to Bitcoin’s 21 million. Despite all of this, Litecoin is currently ranked 15 places below Bitcoin in the market. As of writing, the LTC to USD rate is at 1 LTC = 180.55 USD, whereas the BTC to USD trade rate is at a whopping 1 BTC = 46,074.10 USD. Litecoin’s market cap presently sits at $12.015 billion.
Similar to Bitcoin and other altcoins, Litecoin is an open-source, global payment network that functions without the need for third parties or intermediaries; it is completely decentralized. Made using a copy of Bitcoin’s original source code, Litecoin naturally shares a lot of similarities with the top digital currency. It is these similarities that make Litecoin a popular altcoin for investors looking for a cheaper alternative to Bitcoin.
Litecoin miners operate in much the same way that Bitcoin miners do—by solving immensely complex mathematical problems. This gives them the right to verify transactions, which are then processed, recorded, and added to Litecoin’s blockchain. However, Litecoin utilizes a different mining algorithm called, Scrypt. Unlike Bitcoin’s SHA-256, which favors systems that have larger processing power, Scrypt is more memory-intensive, requiring mining computers with more powerful graphic cards and large amounts of random-access memory (RAM).
What Exactly Is OmniLite?
OmniLite is Litecoin’s answer to the latest crypto sector clamor for non-fungible tokens (NFTs). It is built upon the earlier Omni protocol or what was originally known as Mastercoin, which acted as a secondary layer for the Bitcoin blockchain. This feature was what allowed Bitcoin users to create their own custom tokens and earlier precursors to NFTs. Until the introduction of OmniLite, Litecoin’s protocol did not allow the issuance of tokens based on its blockchain. The development of OmniLite made this possible.
Created through the joint efforts of Omni and Litecoin developer Loshan with help from the Omni Foundation, OmniLite gives users the capability to create and manage their assets on the Litecoin blockchain.
In Litecoin’s announcement during its introduction of OmniLite, the network noted that tokens created using OmniLite can be considered as extensions of Litecoin. Hence, the transactions using these tokens may be recorded on Litecoin’s blockchain. As a result, all of the digital assets created through OmniLite will have access to all the network benefits that Litecoin offers. OmniLite’s development also means that Litecoin’s blockchain will now be able to facilitate stablecoins, a type of cryptocurrency with a value pegged to a stable asset such as the US dollar.
The cheaper on-chain transaction costs on Litecoin can also be a potential market winner. As of writing, Litecoin’s average transaction fee is a meager $0.025, while Ethereum’s fee is at $23.02. Because NFTs require low fees to have a market when they are being traded several times, Litecoin can become a viable platform for markets looking to capitalize on lower transaction fees compared to the more well-known Ethereum platform.
In the same way that Omni makes use of the Bitcoin network, OmniLite would be utilizing OP_RETURN to record the token transactions on the Litecoin blockchain. As of writing, OmniLite supports a wallet mode through Litecoin Omni and can be accessed using Windows, Linux, and MacOS.
However, issues regarding the platform’s scalability are being anticipated, especially once OmniLite gains popularity. This issue stems from the fact that all of OmniLite’s transactions would be recorded on the Litecoin blockchain which in turn puts the blockchain’s capability to scale into question.
Addressing this issue, the Litecoin Foundation’s representative Jay Milla stated in an interview that Litecoin, “has the capacity to handle higher transactions per second at lower fees…” and that they are presently not expecting any issues. Milla further added that research is underway that is aimed at finding out how to make the assets created via OmniLite amenable to be transacted through the Lightning Network.
The Lightning Network is Bitcoin’s second-layer payment protocol that allows transactions to be shifted off the main chain, thus creating a scalable, low-cost, and almost instant way to transact with Bitcoin. The network is built on top of Bitcoin’s base layer.
How It Looks
While it is still too early to pass judgment or assumptions on how Litecoin’s network will be affected by the development of OmniLite, it can be worth noting that despite not being a close competitor of Bitcoin or even Ethereum, Litecoin has still managed to maintain a 100% uptime since its creation 10 years ago.
This can be seen as a testament to the cryptocurrency network’s ability to compete in the market for long periods of time. Furthermore, of OmniLite’s development can also be interpreted as a sign that Litecoin’s network is able to keep up with the constantly changing trends of the cryptocurrency sector.