Litecoin is up over 30% today, leading the pack of cryptocurrencies today which are all rallying. Cryptos have performed very well, and the market has added nearly $45 billion in total capitalization over the past day alone. But why is litecoin spiking like this? The answer is simple:
A hard fork. Litecoin is moving thanks to the announcement of the crypto’s first-ever “hard fork.”
A hard fork in the cryptocurrency world refers to a change in the rules of the blockchain infrastructure that is not recognized as valid by the older software. Hard forks are similar to stock splits in that they are designed, in part, to alleviate barriers to entry for new users.
Once Litecoin hits block 1371111—which is expected to happen this Sunday afternoon—the newly-minted Litecoin Cash Foundation will initiate its split from the existing Litecoin blockchain.
Those holding Litecoin at the time will automatically receive 10 new Litecoin Cash tokens for every one Litecoin they own.
But investors should remember that Litecoin Cash is not affiliated with the original Litecoin blockchain in any way. Litecoin’s creator, Charlie Lee, has already warned that hard forks of his cryptocurrency could be scams looking to benefit from its name.
Still, the Litecoin Cash Foundation attempted to ensure traders that it was simply trying to solve common problems with the network, not scam users.
It remains to be seen.