It is quite surprising to read a headline as this, yes we know. We know you are aware that bitcoin is the world’s largest cryptocurrency currently at about $17,000, while Litecoin is barely half a grand at the moment…oh yes you are right. But before you brush this off as a scam, why don’t you take a couple of minutes to look at what the stats really say.
It is interesting to come to acknowledge the truth that Litecoin (fourth largest cryptocurrency), which has been tagged as the silver to bitcoin’s gold has grown by 7,291% since the beginning of 2017. It is now trading at over $320. Bitcoin, contrastively, has only risen by 1,731% since the beginning of 2017. This is a great confidence booster for people who want to invest in Litecoin as seeing that right about a year ago, Litecoin was only worth $3.
There isn’t any one event that we can say caused this value rise. Some claim the recent surge in interest surrounding cryptocurrencies could have enticed some investors into coming in there. Some think that this switch to Litecoin is as a result of most investors believing that the price of bitcoin is done, thus the need to explore a new cryptocurrency avenue.
What Is Litecoin
Litecoin is one of the clone currencies that stemmed out of bitcoin in the latter part of 2011. Litecoin was intended to be a lighter version of the rather heavier bitcoin currency. This is where it derived its tag as the silver of bitcoin’s gold. For whereas bitcoin takes approximately 10 minutes for each transaction, Litecoin takes just 2.5 minutes for each transaction.
Besides making its transactions faster as a lighter currency, Litecoin was created to have about four times the number of bitcoins that can be mined. Thus, whereas there are just 21 million mined bitcoins, there are 84 million Litecoins that can be mined. Litecoin however is currently at $18 billion total market cap behind Bitcoin, Ethereum, and Bitcoin cash. What’s sweet is that the more Litecoins there are makes it even more appealing to buy small-ticket items with this cryptocurrency.
Charlie Lee, Litecoin’s creator said at a talk by Coinbase in March that
“The vision is always I wanted Litecoin to complement bitcoin—not compete,” “Bitcoin can be used for like moving millions of dollars between banks, buying houses, buying cars. It’s really secure… Litecoin can be used for cheaper things.”
This, most people believe is the basic reason why Litecoin seems to be “underperforming” over the past 6-7 years it has been in circulation: that even its creator does not see its potency. However, Litecoin has still been simple and similar to bitcoin in many technical ways. Lee says this enables them to “merge in” bug fixes of Bitcoin rather easily.
Why Has It Lasted So Long
Litecoin’s creator, Charlie Lee, is first of all a former engineer at Google…like that has something to do with Litecoin’s growth. But the point is that Lee is no amateur to tech savvy stuff. He first got involved in Bitcoin around 2011. A short while later, Lee created and launched Litecoin with the intent of it being a Bitcoin complement and not competitor. One of the questions most people ask is how did Litecoin last this long and not fail like other altcoins .At the talk he also stated that
“It was an excuse to kind of learn the Bitcoin code. I decided that I can actually create an altcoin that’s better than what’s out there, and lastly it was fun to play around with what’s out there.”
It is widely believed that Charlie only took the Litecoin much more seriously earlier 2017 when he announced his departure from Coinbase coming summer. Unlike bitcoin which has its creator to be still unknown, anyone who has a question about Litecoin could simply ask Charlie and would receive an answer right away.
One of the reasons why supporters of Litecoin didn’t ditch the promising coin for its predecessor, Bitcoin, is the difference in the mining process. That of Litecoin requires hardware that is more widely available. Whereas Bitcoin mining uses the SHA-256 hashing algorithm, which needs ASIC microchip technology, Litecoin uses the Scrypt algorithm. Due to the fact that Scrypt requires a larger working memory, most ASICs makers have been prohibited from developing a suitable technology. Instead, Litecoin is now often mined on graphics cards or GPUs. Yet, some firms are beginning to bring ASICs aimed at the Scrypt algorithm to the market, and this could greatly affect the performance of Litecoin on the market .Due to this, Charlie warned in a tweet that
“Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped like 90% in value ($48 to $4). So if you can’t handle LTC dropping to $20, don’t buy!”