Litecoin has been making headlines. As Bitcoin and Ethereum prices declined amidst panic concerning Bitcoin’s future, Litecoin surged. It went from $40 to $55 in June. This quick increase in price has attracted the attention of investors, and they are now re-examining Litecoin. Its main weakness is that it is quite similar to bitcoin, but this might help it grow in value.
History has led us to believe that Bitcoin is powerful enough to control the rest of the online currency market. Bitcoin’s price sank following a 28% rally after people hoped the “Bitcoin Civil War” was coming to a stop. Shortly after, Ethereum price went streaking down following Bitcoin’s. However, even when other cryptocurrencies followed Bitcoin, Litecoin appeared to be immune to that siren call. In other cases, Litecoin price continued to rise when Bitcoin’s remained stagnant.
Looking at the two cryptocurrencies from a technological point of view, Litecoin has the upper hand because of two reasons; its mining ease and transaction speed. Litecoin takes only 2.5 minutes to produce blocks for its blockchain while Bitcoin takes 10 minutes. Because of Litecoin’s ability to perform transactions faster, investors focusing on utility will prefer it over Bitcoin.
Litecoin’s algorithm is very simple compared to Bitcoin—mining Litecoin takes less time and effort. With time this may change, but until then, investors will always run to Litecoin when Bitcoin’s scaling issues frustrate them.
Another big score for Litecoin is its cohesive community. The Bitcoin community is always frustrated, with so much chaos over the upcoming “fork.” Bitcoin’s community could not come to a consensus, but the Litecoin community found common ground. This will attract investors that want stability because Bitcoin’s divided community might end up tearing it apart.
All the above factors give Litecoin an advantage over Bitcoin. However, investors must not decide that Litecoin is the best, by considering these factors alone. Because then, they will be missing one major point; Bitcoin still possesses the first-mover advantage. It is almost ten years old and had enough time to attract investors and take control over the market—an advantage that Litecoin does not have since it was only launched around six years ago.
Smart investors know that “a healthy investment portfolio is a balanced portfolio.” Based on that logic, it is wise to invest in several cryptocurrencies. Some investors will not agree with this because they always believe that only one online currency will triumph. However, with more cryptocurrencies in the market, and a majority of them offering fantastic utilities, it is very likely that most of them will still be there in the future.
Analysts think shortly, several cryptocurrencies will be operating in the global economy. Therefore, when an investor is evaluating Litecoin, they should focus on the characteristics that set it up to become a success in the global economy. Also, they should analyze and see if those features will help it survive its rivalry with Bitcoin. Of course, it does not have to be stronger than Bitcoin, but it should stay relevant in Bitcoin’s world.
