2018 was a great year for Litecoin. Despite the bear market, Litecoin’s ecosystem has made some incredible strides. Abra added Litecoin as an underlying asset to their mobile dex, Lightning Labs included Litecoin support in their Lightning Network client implementation lnd, and Lite.IM integrated Litecoin transactions into Facebook Messenger; just to name a few.
But now that the year is coming to a close, what should we keep an eye on for 2019? Here are 4 things to look forward to for Litecoin:
Increase in Institutional Investors and Infrastructure
Fidelity launched an institutional platform for their customers where they could buy Bitcoin and Ethereum in 2018. ErisX recently closed a Series B fundraise of $27.5 million with the goal of offering spot and futures trading in Bitcoin, Bitcoin Cash, Litecoin, and Ethereum by Q2 of 2019. Bakkt also postponed their launch to January 2019 and has expressed interested in adding other currencies to their platform such as Litecoin.
All of these developments set the stage for institutional money to flow into the market.
Atomic Swaps via the Lightning Network
One thing to pay attention to specifically is the development of Atomic Swaps through the Lightning Network. Atomic Swaps allow users to instantly change Litecoin for Bitcoin without having to wait for confirmation times. In light of this, Litecoin’s utility will increase as it will become a cheaper on-ramp to the Bitcoin Lightning Network.
For example, let’s say someone wants to make a LN payment to buy a cup of coffee but has run out of Lightning Network Bitcoin to spend. They can open and establish a Lightning Network channel with Litecoin faster and cheaper than if they were to do it with Bitcoin. After this is completed, they can instantly swap it for Bitcoin on the Lightning Network to make the payment.
Atomic Swaps also enables decentralized exchanges, a project the team at SparkSwap is building.
Rootstock, the people behind the sidechain Smart Bitcoin (SBTC), has added Litecoin support to their roadmap. This means users will soon be able to redeem their Litecoin for the sidechain Smart Litecoin (SLTC) in order to utilize ethereum-like smart-contracts. Want to create a Litecoin version of CryptoKitties with non-fungible tokens? Or maybe you want to tie a digital asset to a token from the Litecoin blockchain specifically? All of these things will be possible with SLTC.
Diego Gutierrez-Zaldivar also shared on The Lite Podcast that he hopes to implement drivechain technology on Litecoin to push this feature onto Bitcoin, a role Litecoin has played previously with Segregated Witness.
One of the final frontiers for Litecoin to explore for it to become truly fungible is privacy. As the Lightning Network(LN) grows, transactional privacy will inherently increase as payments aren’t recorded on the blockchain. However, this doesn’t completely solve the problem. A stranger can still see how much Litecoin is in a Lightning Network channel simply by looking up the LTC address on an explorer. This is the equivalent of having public checking accounts that anyone can see.
Confidential Transactions is a technology that could help solve this by obfuscating the amount of Litecoin that’s being sent to an address. This way people will no longer able to view how much you have in a Litecoin address without your permission. Opening a Lightning Network channel with a Confidential Transaction would provide a level of privacy that would be hard to beat.