At first glance, it might appear that Bitcoin and Litecoin find themselves in a state of competition: they have a nearly-identical open source software architecture, they aim to accomplish the same goal of enabling digital payments around the world in a decentralized way and without a trusted third party, and they offer different currencies from which users can choose.

As a matter of fact, there are some folks from amongst the Bitcoin maximalist group who refer to Litecoin as ”inflation” to the 21 million hard cap: since Litecoin is so similar with Bitcoin and inherits the same codebase, it adds another 84 million coins to the market. Some critics also take this argument further in order to imply that Litecoin’s existence diminishes the desire for users to pay Bitcoin’s higher main chain fees.

But nobody who understands the spirit of free open source software and also knows how markets work would make such an assessment. Firstly, because a fork of the codebase makes more developers work on it — and therefore provides extra testing, research, and development to the original implementation. Secondly, because there’s definitely a market for inexpensive and fast transactions on a decentralized and immutable ledger that’s secured by Proof of Work. As Bitcoin fees rise and the user experience for second layers remains too cumbersome for the average person, the free market will search for alternatives with little to no consideration for any ideology: it’s only a matter of finding the best tool for the job.

Now let’s take a walk down memory lane to present the moments when Litecoin has been instrumental in helping Bitcoin improve. It all starts with the Genesis Block, which Charlie Lee mined on October 13th 2011. At the time, it didn’t seem evident… but five years later, the Litecoin creator would demonstrate how Satoshi Nakamoto should prove that he is the creator of Bitcoin. He signed the Genesis Block using his private key, by typing the message ”I, Charlie Lee, am the creator of Litecoin”. The cryptographic proofs were valid, so no further claims or stories were necessary. Why is this such a big deal? While some bitcoiners were genuinely getting fooled by Craig Wright’s stories, Charlie proved how it should be done in practice — and this couldn’t be possible in the absence of a fork with a similar design, whose creator is still actively involved.

In 2017, at the peak of Bitcoin’s scaling debate when the SegWit soft fork was regarded with skepticism, Litecoin embraced this upgrade. Charlie Lee took the time to speak with the miners in order to reach consensus, so that the new Bitcoin improvement would be proven safe to the rest of the world. SegWit, which fixes a malleability bug, enables the Lightning network, and also introduces a creative way of increasing the block size. However, it was never a necessity for Litecoin — the fees were weren’t high and the blocks rarely ever filled to full capacity. But it was a calculated risk in order to legitimize Litecoin as Bitcoin’s little brother, the one who can make bold moves with experimentation and minimize the costs of potential errors.

The SegWit story was a real success — a fact that the free market echoed and reflected on the price of LTC. This incentivized testnet approach proved to be a brilliant idea. So Litecoin amped it up to 11 with the Lightning Network. Back in 2018, doing Lightning stuff outside of the safe environment of testnets was often described as ”reckless”. Many bitcoiners were skeptical about this layer two, while developers were reluctant to lose BTC with their experimentation. This is why much of the early testing took place on Litecoin. Companies such as ACINQ and Lightning Labs quickly became interested in using Bitcoin’s favorite ally for their layer two projects. After all, they could just copy the successful code and paste it on top of Bitcoin with little to no adjustments. Given the conservativeness of Bitcoin, the Lightning network couldn’t become such a rapid success without involving Litecoin.

There’s also something to be said about merged mining with Dogecoin. Though the culture of monetary maximalism in Bitcoin effectively prevents such an implementation from happening (and some analysts suggest that merged mining contributes to centralization), it’s provably good for increasing the miners’ revenue. The idea of Merged Mining was first proposed by Satoshi Nakamoto himself, when Namecoin (a separate blockchain network for data and domains, which was launched as the world’s first altcoin) became popular. Essentially, merged mining is about using the same Proof of Work to secure two different networks, thus also enabling miners to collect rewards in all currencies involved.

Since August 2014, Litecoin has taken Dogecoin by the paw to feed it with the world’s largest portion of Scrypt Proof of Work miners. But what started as an act of benevolence for the sake of preserving a meme and its community has grown into a beautiful friendship which provides mutual support: as LTC miners see their rewards getting halved every four years and the price doesn’t always go up, there is still a profit to be made from DOGE rewards. Since Elon Musk turned the cute dog money into the unofficial currency of his ventures (with Tesla even accepting dogecoins in their merchandise store), the coin depicting the world’s most popular Shiba Inu has truly started a space exploration of its own. Today, it’s not unusual for Dogecoin to register higher daily transaction volumes than Litecoin — but it’s the Litecoin network that provides the security infrastructure.

This symbiosis can inspire bitcoiners to also consider securing other SHA256 coins. Sure, most community members probably hope that BCH and BSV will fail, as a symbol of having won the scaling wars. But Bitcoin should also have a sidechain with big blocks, which enables anyone to get onboarded with low fees while holding their own keys, whose validation and storage is optional among node operators, and that gets merge mined with BTC. The currency doesn’t have to be entirely different — it can even be BB-BTC (Big Block Bitcoin), a layer two token that’s backed 1:1 by BTC locked on the base layer.

There’s already a proposal for this which was initiated by Paul Sztorc, whose idea of Drivechains (as described by BIP300) is becoming increasingly popular over the years… and once again, Litecoin appears to be more open to the idea. As Charlie Lee revealed in S15 E34 of the Bitcoin Takeover podcast, once all the fine details surrounding MWEB (MimbleWimble Extension Block) get finalized and there is enough support from various types of wallets, Drivechains might be the next big improvement.

Speaking of MWEB, it’s currently the best privacy and scaling proposal that’s 100% compatible with Bitcoin, has a battle-tested implementation that’s been around for a couple of years, and can be activated through a soft fork.

All previous ideas, from Confidential Transactions to ring signatures and ZK SNARKs, require hard forks and much more radical changes to the overall design. Not Litecoin’s MWEB, though: Bitcoin can activate it just like it did with SegWit and devs can build apps on top of it just like they ported Lightning network clients from one network to the other.

Given all the useful research and development that it creates, Litecoin is a net positive for Bitcoin — and possibly its greatest ally, as it puts skin in the game whenever a significant improvement proposal rises to prominence and then provides incentives for anyone who’s capable of improving the design. Haters gonna hate, but the Chickun will keep on arising and helping Bitcoin.

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