Litecoin [LTC]: The Greatest Adversary of Bitcoin 20360
Analysis
Cryptostx
Aug 5, 2018 at 11:33 AM

Litecoin, silver to Bitcoin’s gold, offers faster and cheaper transactions. It is considered to be a major adversary of Bitcoin as its conception is very similar to that of Bitcoin. The recent research paper on Litecoin published by etoro established the fact that the ratio between Bitcoin and Litecoin is akin to that of gold and silver. The study further compliments the coin by saying, “Litecoin (LTC) is by far one of the most established networks in the crypto space. It is already being used by many as a store of value and means of exchange and so can be considered as money. Furthermore, the groundbreaking partnerships that are being formed by the Litecoin Foundation position this crypto for long-term success.”

What is Litecoin? 

In simple words, Litecoin is an upgraded version of Bitcoin. The Bitcoin Core client was forked to create Litecoin in 2011. As per a report on Medium, Charlie Lee is an ex-Google and ex-CoinBase employee who wanted to develop a lighter version of the original digital currency Bitcoin. So, on 7th October 2011, he launched Litecoin through an open-source client on GitHub and its network went live a week later.

Litecoin was one of the first few cryptocurrencies to identify two of the most important drawbacks of Bitcoin- its transaction speed and limited supply. While Bitcoin takes around 10 minutes for block confirmation, Litecoin only takes about 2.5 minutes, making it 4x faster than Bitcoin. Also, while there can only be 21 million Bitcoin, Litecoin’s supply is 84 million, 4x more than Bitcoin.

Team Behind Litecoin

Litecoin was released by Charlie Lee in 2011. From 2011 to 2016, the Litecoin team was only made up of Lee and the Lead Developer Warren Togami and no other full-time developer. However, now there is a full-fledged team of full-time and part-time developers, the board of directors, and operations director.

Unlike Satoshi Nakamoto, the infamous creator of Bitcoin, Charlie Lee is a transparent and vocal frontman and regularly shares his thoughts on Litecoin and cryptocurrencies on Twitter. He is also a member of Litecoin Foundation, a non-profit organization which works towards improving Litecoin to help the society.

Bitcoin vs. Litecoin: What’s the Difference?

Apart from the transaction speed and supply discussed above, Litecoin also has many other important aspects that are different than Bitcoin.

  1. Mining algorithms- Bitcoin uses SHA-256 algorithm while Litecoin uses Scrypt. While both the algorithms have their pros and cons, Scrypt is generally considered better than SHA-256 which is more complex and slower. But to its defense, it is said that the slower speed of SHA-256 means a more thorough processing of transaction with lower chances of error.

Also, to mine a coin with SHA-256 algorithm hash rates of GH/s (Gigahashes/second) or higher is required. This means that mining can be very difficult for individual miners. On the other hand, Scrypt is known to be easier and can easily run on an existing CPU, making it a preferred choice for individual miners. As compared to SHA-256, even the power consumption of Scrypt is lower.

  1. Transaction differences- The transaction differences between the two also make Litecoin a better option than Bitcoin. Litecoin is able to handle higher transaction volumes as the block generation is faster. While Bitcoin too can match the transaction volume of Litecoin, the code running the Bitcoin network will have to go through some serious upgrades.

However, experts from the Bitcoin community say that faster block generation or faster transactions of Litecoin do not really work in its favor against Bitcoin. This is because most of the merchants who accept crypto payments allow zero-confirmation transactions. As the transaction processing begins instantly with both Bitcoin and Litecoin, the latter is only able to confirm the transaction faster.

A customer can pay with Bitcoin or Litecoin for their purchase and leave the store in the same amount of time. It is just that the transaction with Litecoin would be completed faster and the one with Bitcoin would be completed slightly later. However, both of them won’t really cause any kind of inconvenience for the customer or the merchant.

How to Mine Litecoin? The Ultimate Guide to Litecoin Mining

Litecoin mining is the process of using specialized hardware for creating new Litecoin’s, securing the Litecoin network and verifying transactions. Just like Bitcoin, Litecoin uses POW (Proof-Of-Work) concept which makes the mining activity costly and time-consuming.

For sending Litecoin, the transaction should be added to a block. Miners use POW for verifying these transactions. In return, miners are rewarded with virgin Litecoin, coins that are newly released and have not been in existence before.

The mining difficulty is regularly adjusted to balance any increase in the total hash power mining Litecoin. Every 2016 blocks, the difficulty is automatically adjusted. Apart from this, even the block reward is halved at every 840,000th block. Halving of the reward and the rising mining difficulty has made Litecoin mining non-profitable for individual miners unless they invest in a high-end mining rig.

Litecoin Price Fluctuations

As per CoinMarketCap’s list of cryptocurrencies where the coins are listed on the basis of their market cap, LTC stands at the 7th spot with a current market cap of $4,994,916,476 and a circulating supply of 57,478,107 LTC.

While its rise in 2017 was colossal and it surely made a lot of millionaires last year, nothing big has really happened in 2018 yet. Just like all the other top cryptocurrencies, its price has only fallen since the beginning of 2018 and it is currently trading around $86 with a 24-hour volume of $346,311,000.

Rise and fall of 4%-8% on a daily basis is very normal for Litecoin and investors are advised to invest carefully. The ones who made money on Litecoin in 2017 were people who continued holding their positions throughout the rise and drops. If you do want to invest in it now, follow the same strategy and you might be able to make a decent amount of money.

Why Did Charlie Lee Sell All His Litecoin’s?

A major reason for a lot of new investors to not touch Litecoin was the fact that its founder, Charlie Lee, sold off all his Litecoin’s in December last year. While Lee was accused of dumping his coins when Litecoin’s price hit a lifetime high of $350, he explained in a Reddit post that the reason was a conflict of interest on whether or not he should hold LTC as the founder of the cryptocurrency.

After the announcement, the price of LTC dropped around 30% in a matter of 2 days. However, Lee has confirmed that he is not leaving the LTC team and he is still the Managing Director of the Litecoin Foundation.

However, the founder of a cryptocurrency selling all his coins significantly affected the confidence of people on Litecoin and its future. Since then, things have stabilized to an extent and people have again started investing in Litecoin.

So, Should You Buy Litecoin While It’s Cheap Now?

Now to the main question, should you invest in LTC when it is trading around $100? While there is no simple yes or no answer to this question, there are a few things that can help you make a decision.

For one, Litecoin is one of the oldest and most established cryptocurrencies. It has high trading volume on a daily basis and is regularly listed on new exchanges. Moreover, Charlee Lee in one of the recent tweets has also mentioned that an unexpected surprise from LTC this year. On the basis of his tweets in the past few years and his Litecoin leadership, he wouldn't have said this unless it isn’t something really big happening to Litecoin. The “surprise” might shoot up the LTC price this year.

But on the downside, LTC is highly volatile and major movements can be seen in a matter of minutes. Also, while Litecoin is better than Bitcoin in many aspects, there are now way more powerful cryptocurrencies now available.

Where Can You Buy Litecoin?

As Litecoin is one of the most popular cryptocurrencies, it is available on all the top exchanges including Binance, Bitfinex, OKEx, GDAX, Bit-Z, Huobi, HitBTC, Kraken, and many more.

If you want to buy LTC, it is not necessary that you buy a full LTC at once. You can buy $50 or even $10 worth of LTC from any of these exchanges and you’ll get the equivalent amount of LTC as per its current trading price.

Once you’ve purchased Litecoin, you can keep it on the exchange or send to an LTC wallet. There is an official LTC wallet on LitecoinCore.org that you can use for storing LTC and then there are also several other wallets that you can try.

 Conclusion

With features that are better than Bitcoin, an experienced development team and a very active founder, Litecoin was poised to achieve great success. And it did far better than investors expectations in 2017. While there is a possibility that it might again rise massively in future, no one really knows when this would happen.

While it surely is a solid coin for investment, especially at this discounted price, investors should know that it’d most probably be a very turbulent ride with LTC. Invest wisely and only invest what you can lose.

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