Inspite of bitcoin’s relative youth (10 years old), its manic popularity has created a digital asset revolution as well as many competitors trying to add unique value to this new age space. Tons of new money from both individual investors as well as institutional entities means that these alternative cryptocurrencies, often referred to as ‘alt coins’ are under heightened scrutiny as traders are trying to find ways to diversify their crypto portfolio. One of the well-known alt coins is Litecoin. It has global appeal, significant market capitalisation and a satisfactory level of potential for adoption.
Litecoin was released in the shadow of bitcoin. It found its inspiration from bitcoin, especially because if its decentralised approach to money. Charlie Lee, the creator of Litecoin, is an ex-Google employee and Director of Engineering at Coinbase, one of the largest exchanges in the world and the first to make Litecoin available for trading alongside Bitcoin and Ethereum. Inspite of many people seeing Litecoin as a copy of Bitcoin, it has significant technical differences that separate the two. These differences are chief contributors to Litecoin’s price coupled with the positive image it has with traders and businesses.
Litecoin was created in the image of Bitcoin in its initial period and was one of the first to tweak this formula. The first change came in the form of Litecoin’s blockchain which makes use of the Scrypt protocol as opposed to SHA256. This is of little consequence to traders but miners who utilise hardware to run bitcoin’s network cannot just switch over to lite coin. This ensures that larger mining groups are kept away from Litecoin and this is the aim as it blocks miners from easily increasing their profits by swapping to another coin. This creates a more decentralised experience. Litecoin also has a larger block size and more coins in circulation which makes it cheaper and faster to transact with. Litecoin has been readily adopted within cryptocurrency services as well as in the retail market due to its significant advantages.
Litecoin Gains Momentum
One of the more prominent features of litecoin is also one that provides it with the most potential for disruption and creates a lot of confidence within the digital asset community. When Segregated Witness was released as a potential blockchain upgrade aimed at enabling faster off-chain transactions, Litecoin got behind the proposal and became the first to integrate it. SegWit will allow Litecoin to utilise the Lightning Network, allowing participants to trade cryptocurrencies at as close as possible to no cost.
Enthusiasts of the space who have tons of coins to explore have shown an inclination to lite coin owing to its speed. In tests where a user compared the speed at which coins were transferred from an exchange to a hardware wallet, Litecoin was at the top of the pile. Companies paying attention to Litecoin’s rapid progress on the payment front are beginning to integrate it into their own ecosystems.
The ease of transacting with Litecoin makes eCommerce a great ecosystem for adoption. Stored like BTCTrip, AllThingsLuxury and Bitcoin.shop to name a few have joined in. Overstock.com, the popular retail commerce giant is now accepting Litecoin as a mode of payment. People can now pay for presents, holidays, household appliances and jewelry through Litecoin. Coupled with encouraging retail adoption, virtual currency merchants, exchanges and wallets are also integrating Litecoin in increasing numbers.
How It’s Viewed by Participants
At the end of the day, any digital asset’s success is measured by its ability to have application and solve relevant problems. People focus on how prices behave relative to other coins. Litecoin is as accessible as bitcoin in this aspect because it has been in the market for almost as long and this means that any service that chooses to eliminate Litecoin from their equation is limiting their audience and appeal.
Litecoin has a relatively drama-free community as well as an even keel and this gives it less volatility and a more steady trend which makes it ideal for arbitration, trading, spending and even fundraising. Enthusiasts of the space have analysed bitcoin’s market capitalisation relative to that of Litecoin based on its total supply as well as some other traits and have almost unanimously announced that it is undervalued.