Litecoin was given a big boost Tuesday when the American Express-backed crypto trading app Abra solidified its decision to use Litecoin smart contracts feature to power its products, gaining as much as a 15% in trading price over the day as reported by Business Insider.
Litecoin gets Big Boost from Abra Announcement
Creator of Litecoin Charlie Lee has been hinting there was big news in the making for a while and now its dropped in the form of Abra; a new app that allows people to invest in 20 crypto and 50 fiat currencies with no fees, almost instantaneously using the power of Litecoin smart contracts.
Abra startup CEO Bill Barhydt explained the reasons for changing from Bitcoin to Litecoin in a Reddit AMA on Tuesday, April 3. Responding to a question about the decision he broke it down like this;
“We went with Litecoin as the second asset class, after bitcoin, for our smart contract investing solution for 3 primary reasons: 1. commitment to bitcoin compatibility: core roadmap, p2sh support, lightning support, etc; 2. slightly better scalability than bitcoin in short term (block size and block times); 3. mining fees which are primarily a function of #2 although this is more of a short term benefit as mining fees would likely sky rocket if we’re successful anyway!”
Though the announcement was made at the end of March there was little buzz effect until after the AMA. Abra has thus far raised over $40 million including undisclosed amounts from American Express and Foxconn, Apple’s Asian parts manufacturer.
How Abra Works
Barhydt fielded questions about how he plans to compete with trading giants like Binance and Coinbase by saying that Abra is not a trading platform but a simple app intended for use by retail investors to gain access to many kinds of assets, he went on to explain;
“We enable this investment exposure using a synthetic cfd like model based on p2sh multi-sig scripts on the litecoin and bitcoin blockchains. Our goal is to open this up to different asset classes over time, not just the top 20 cryptos and fiat but even stocks, commodities, etc. An example of this vision that we hope to bring to market in the future is for someone in Ghana to buy exposure to Apple … using the same app you’re able to download today from the app store.”
If Abra can attract a significant amount of users it will further drive demand for Litecoin which in turn could reduce the circulating amount of LTC, pushing the trading price up. If nothing else Abra’s decision to choose Litecoin over Bitcoin or Ethereum adds credibility and may boost investor confidence in its future.