Usually asked question
Litecoin is designed to be digital silver to bitcoin’s digital gold. Something that works better as a day to day payment system, if I understand correctly. If that’s the purpose of litecoin, doesn’t that get defeated by the Lightning network? If the lightning network can offer >60000 TPS, why would anyone use litecoin as digital silver, when bitcoin already fills that purpose, as well as being digital gold?
Answer
People seem to be combining the ideas of digital silver/digital gold, store of value, and transaction speed/efficiency/scalability all into one. They’re separate things and keeping them separate will help me answer that question.
Yes, digital silver stores value and so does digital gold, yes digital silver is currently quicker and cheaper as a currency. But there’s so much more to the BTC/LTC dynamic than just efficiency.
Even if Bitcoin became way more efficient through wide adoption of the LN, it will still have slower block times and thus slower confirmations. (People still don’t want to wait 30 minutes for 3 confirmations for non-LN transactions). Maybe it’ll also have cheaper fees, but probably not. Also, there’s the psychological fact that BTC is very expensive and some people would rather have 1 whole of something rather than .003764829 of something. And, eventually, BTC could be worth more than $1,000,000. Who wants to buy into something if they’ll never in their life be able to own a complete unit it when they could buy something similar for cheaper and get a whole unit of it?
LTC being a complement to BTC works great for right now. It fills the voids left by BTC’s flaws. Will that dynamic still be a thing 8-10 years from now? I don’t know. Nobody knows.
But Will BTC even be able to change for the better over the next 8-10 years? That’s a better question. BTC is very slow to change, and if there is change it splits the community. Litecoin is quick to change and it doesn’t split the community… we’ve got mimblewimble coming and nobody even batted an eye.
So the litecoin/Bitcoin dynamic isn’t just about the day-to-day payments. There are many more factors at play. And even if Bitcoin became the best choice for day-to-day payments, I still think there would be a place for LTC, for the reasons noted above.