It’s a calm day in the otherwise stormy crypto world. There hasn’t been much noise in the last 24 hours. Cryptocurrencies are trading in green. Litecoin, in particular, has been the second-best performer in the top 10 ranks with 7.36% gains in the past one day. At the time of writing, the LTC to USD rate was slightly shy of $160.00.
One theory why demand for the coin seems to be strengthening is because of the upcoming “hard fork.” We can’t say for certain, but it’s a prospect we’ll discussing today.
Litecoin is about to split and founder Charlie Lee warns investors to steer clear of the new crypto that’ll take birth following the split.
A team of developers is splitting (hard forking) Litecoin to create a new crypto called “Litecoin Cash.” The Litecoin hard fork is expected to occur on February 19, 2018.
How does this affect you?
Following the hard fork, Litecoin holders will be issued 10 Litecoin Cash coins for every Litecoin they own. So if you’re an LTC HODLer, good for you. You could pocket these free tokens, and if they turn out to be worth anything, you could sell them to increase your Litecoin holdings.
But if you’re looking to buy Litecoin for no better reason than to get some free coins, then proceed at your own discretion because this may be a huge pitfall.
The fact that this project is completely opaque with little to no verifiable public information raises giant question marks. There’s also no certainty if there will actually be a hard fork at all.
Any computer programming savvy person can claim to hard fork a cryptocurrency. After all, their codes are easily available on GitHub. Having seen far too many cases of pump-and-dump in this space, we are beginning to take such announcements with a grain of salt.
There are at least three big red flags for me here that would deter me to trade Litecoin Cash.
First, the identity of the developers is absolutely anonymous. There are no names or photos, and no verifiable information that would allow us to put a face to the person(s) in charge of this project. This increases obscurity.
Secondly, the reason to hard fork remains ambiguous. It may have made some sense in the case of Bitcoin, when it was hard forked to create Bitcoin Cash—an offshoot that made it cheaper and faster—but we don’t see the logic behind Litecoin’s split.
Litecoin is already cheap and fast to transact in. Users have virtually never had a problem with LTC as they did with Bitcoin. It’s worth pointing out here that although the developers called it the “real Bitcoin,” Bitcoin Cash failed to replace Bitcoin. Despite having nearly the same supply as Bitcoin, Bitcoin Cash trades for about one-sixth of its price. Nearly half a dozen other Bitcoin hard forks that followed likewise turned out to be duds.
Since Litecoin Cash will have a coin supply 10-times that of Litecoin’s, we expect it to trade for pennies on the dollar.
Finally, and most importantly, Charlie Lee has explicitly warned investors to consider all Litecoin hard forks as scams.
Palwasha Saaim