Litecoin is a digital currency designed to function as an open-source, decentralized global payment network.<\/p>\n
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It is a spinoff of Bitcoin, with the key differences being that Litecoin has faster transaction times and lower fees.<\/p>\n
As it is a spinoff of Bitcoin which is seen by many scholars to be halal, we believe Litecoin would also be halal in light of their technical similarities.<\/p>\n
Read on for a much deeper dive into Litecoin itself and the Islamic views on it.<\/p>\n
Litecoin is a decentralized digital currency that aims to enable instant near-zero cost transactions worldwide.<\/p>\n
It was created in 2011 when then Google engineer Charlie Lee copied Bitcoin\u2019s source code and made a few key changes to make Litecoin faster and more accessible than Bitcoin.<\/p>\n
According to Lee, Litecoin was designed to be the \u201clight version of Bitcoin\u201d. <\/p>\n
Similarly to Bitcoin, Litecoin uses a blockchain (public ledger) to keep track of all transactions made on its network.<\/p>\n
It uses a proof of work consensus mechanism to approve transactions and add them to the blockchain.<\/p>\n
This is where miners compete to solve problems to win the right to certify blocks of transactions and obtain a block reward of tokens in the process as well as the transaction fees. <\/p>\n
Litecoin has three key differences to Bitcoin:<\/p>\n
Its main use case is to be a medium of exchange and facilitate fast and cheap payments across the internet. <\/p>\n
Litecoin is often used to send cryptocurrencies across exchanges and wallets as its network fees are cheaper than the likes of Bitcoin and Ethereum.<\/p>\n
For example, to send \u00a31k between Coinbase and Binance, you could buy \u00a31k worth of Litecoin on Coinbase and send it to Binance for a near-zero fee.<\/p>\n
As one of the more established cryptocurrencies, Litecoin has garnered mainstream adoption and can be used to transact with various mainstream companies.<\/p>\n
Yes at the time of writing, there have been ~ 123k transactions on the Litecoin network over the last 24 hours with an average transaction value of 24.42 LTC ($2,028). This is less than half of Bitcoin\u2019s ~277k daily recorded transactions over the same period.<\/p>\n
Strengths<\/strong><\/p>\n <\/p>\n Weaknesses<\/strong><\/p>\n Litecoin (LTC) is one of the most established cryptocurrencies and currently is the 22nd largest cryptocurrency by market cap.<\/p>\n LTC can be bought from most exchanges including Coinbase and Binance<\/span><\/a>. It reached a peak of $412.96 in May 2021 and is currently trading around $45 at the time of writing, having lost a whopping ~90% of its peak value.<\/p>\n This is in contrast to Bitcoin which is trading at ~65% below all-time highs.<\/p>\n Whilst both positions are obviously not ideal, it does show that Bitcoin holds up better than Litecoin.<\/p>\n However, there is a promising new development that could be a good catalyst for Litecoin\u2019s price. There is a new upgrade named MimbleWimble being integrated that allows it to compete with the privacy cryptos such as Monero or Zcash.<\/p>\n Litecoin is often represented in the media as an alternative to the likes of Bitcoin and Ethereum.<\/p>\n However, they are fundamentally trying to achieve different things. Bitcoin wants to be the pre-eminent store of value (i.e. “digital gold”) whilst Ethereum wants to be the Internet’s smart computer with its smart contract functionalities.<\/p>\n Litecoin on the other hand is trying to become the Internet’s favoured payment currency. The following cryptos are genuine alternatives to Litecoin.<\/p>\n Another fork of bitcoin, Bitcoin Cash took a different approach to scaling payments. BCH uses a larger block size to accommodate more transactions. This also results in lower transaction fees as there is less competition to get your transaction into a block. <\/p>\n Nano<\/span><\/a> is a cryptocurrency whose transaction speed and fees put Litecoin to shame. Nano transactions can close under a second and no transaction fees are charged. Nano achieves zero transaction fees by relying on users to maintain the network for the sake of ensuring a working network instead of for direct monetary gain.<\/p>\n Dogecoin is akin to being a grandchild of Litecoin, with it being a fork of LuckyCoin which in turn is a fork of Litecoin. Doge has been made famous by Internet meme culture and backed by none other than Elon Musk.<\/p>\n Initially started as a joke to poke fun at other cryptos, Doge has begun to see some mainstream adoption so could theoretically go on to become a genuine contender to Litecoin. However, Doge is not as scarce as Litecoin due to its theoretical infinite supply.<\/p>\n When it comes to cryptocurrency in general, our view is that investing in crypto is halal as long as the project itself is halal. We see cryptocurrency as a type of digital asset (with the potential for some to become fully-fledged currencies). <\/p>\n We don\u2019t find there to be anything problematic from an Islamic perspective about blockchain technology, and cryptocurrency which is a use of blockchain and seeking to profit from it. For more on our approach to crypto, check out this article<\/span><\/a>. <\/p>\n You want to avoid projects where:<\/p>\n Litecoin is a decentralised payment network similar to Bitcoin with few differences regarding the sharia analysis. Bitcoin is a straightforward cryptocurrency and has been deemed permissible by many scholars. There is also no overt association between Litecoin and impermissible activities. Therefore by extension, Litecoin is halal due to a similar analysis to Bitcoin.<\/p>\n If you follow the opinion that crypto isn\u2019t permissible then Litecoin by extension would also not be permissible.<\/p>\n In summary, Litecoin is a solid decentralised global payment network that is used widely due to its quick processing times and low transaction fees. We are satisfied that it is indeed a halal asset and thus permissible for Muslim investors to buy.<\/p>\n\n
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Is Litecoin a good investment?<\/h3>\n
Alternatives to Litecoin<\/h2>\n
Bitcoin Cash (BCH)<\/h3>\n
Nano (NANO)<\/h3>\n
Dogecoin (DOGE)<\/h3>\n
Is Litecoin Halal?<\/h2>\n
Sharia analysis<\/h3>\n
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<\/h4>\n
The case for yes and why<\/h3>\n
The case for no and why<\/h3>\n
Conclusion<\/h2>\n