Litecoin has a real shot to overtake bitcoin


via BI

  • Bitcoin’s reign as a medium of exchange appears to be coming to an end.
  • Litecoin has some advantages.
  • If Litecoin does become the medium of exchange it doesn’t mean its price will necessarily increase.

Last year, cryptocurrencies put themselves on the map with perhaps the greatest single-year performance in the history of any asset class. After beginning the year with a market cap of $17.7 billion, digital currencies finished 2017 with an aggregate market cap of $613 billion, representing an increase in value of more than 3,300%.

2017 was also the first time we saw a clear bifurcation in purpose among cryptocurrencies. Most have chosen to focus on the development of blockchain technology, which is the digital, distributed, and decentralized ledger underpinning most virtual currencies that’s responsible for transparently logging all transactions without the need for a financial intermediary. Blockchain is primarily being marketed at financial institutions, although it has plenty of non-currency applications, too.

The other purpose for cryptocurrencies is as a medium of exchange and a replacement for cash. There aren’t too many digital currencies focused on securing merchants, but that’s exactly what bitcoin, the largest cryptocurrency in the world by market cap, and Litecoin, which I’d consider to be bitcoin’s greatest rival, are trying to do.

Bitcoin’s reign as a medium of exchange appears to be coming to an end

Bitcoin was the first cryptocurrency to be traded back in March 2010 and is often credited with bringing blockchain technology into the spotlight. Having a first-to-market advantage has certainly helped with its media exposure and its ability to sign up new merchants. In many instances, bitcoin is the cryptocurrency that investors will need to buy to exchange for less popular digital currencies on decentralized exchanges.

Yet for as consistent as bitcoin has been, Litecoin is catching up. As bitcoin’s popularity has grown, chinks in its armor have become clearly visible. Its large, open-source network has made gaining consensus difficult when trying to implement needed software upgrades to its blockchain. With bitcoin, 80% approval is needed among the community to implement upgrades. An inability to reach this consensus has caused numerous forks, creating new digital currencies in the process, and relegated bitcoin to an ever-slower and pricier network. On average, the typical bitcoin transaction takes longer than an hour to process, with fees of around $28. That’s almost the same cost as a bank wire transfer, and as a result it makes bitcoin a poor choice for day-to-day transactions.

On one hand, transactions that take a little over an hour to process are still favorable when talking about cross-border remittances. With the current banking system, cross-border transactions can take up to five business days to clear. On the other hand, bitcoin’s processing speeds and transactions fees are considerably worse than its peers. To its benefit, few digital currencies are attempting to become a medium of exchange, so it’s not had much in the way of competition. However, Litecoin is, and it’s running circles around bitcoin.

Litecoin has a real shot to overtake bitcoin

Though Litecoin is often described as “bitcoin-Lite,” and is considered to be in cooperation not competition with bitcoin, it most definitely has the tools to push aside bitcoin and become the go-to medium of exchange for digital currency users.

To begin with, the processing times aren’t even close. HowMuch.net recently examined maximum transactions processed per second and found that bitcoin maxed out at seven per second, compared with 56 for Litecoin. Of course, transaction speed isn’t everything – block-processing times matter, too. Bitcoin completes a block about every 10 minutes. By comparison, Litecoin completes a block in a fourth of the time, about every two and a half minutes. So, to summarize, Litecoin can process transactions quicker than bitcoin, and its quicker block time suggests that it can handle more capacity than bitcoin.

Speaking of network capabilities, Litecoin has implemented an upgrade to its blockchain known as Segregated Witness, or “SegWit” for short. SegWit has boosted the capacity of Litecoin’s blockchain to handle more merchants and transactions, as well as improved processing speeds and lowered transaction fees. Bitcoin was supposed to implement SegWit, but it couldn’t gain the needed consensus to do so.

Litecoin also has its founder, Charlie Lee, working full-time on securing new merchants and improving its network. Since Lee moved from a part-time to full-time role, Litecoin’s average daily transaction count has jumped from a few thousand to between 40,000 and 50,000 transactions per day. Understand that some of these transactions are investors buying and selling digital currencies. Nevertheless, Lee has had a clearly positive impact in terms of drumming up interest for Litecoin with merchants, consumers, and investors. By comparison, bitcoin has no one specifically leading its charge, and the number of daily transactions conducted on its network has been range-bound for two and a half years.

Litecoin appears to have a clear path to becoming the go-to medium of exchange over time. Keep in mind that this doesn’t necessarily mean its coin will increase in value, as there’s been virtually no fundamental reasoning behind cryptocurrency valuations to this point. But if there’s one medium of exchange virtual currency that has a genuine shot of surviving over the long run, Litecoin looks to be it.

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John,

With much well earned respect. Bitcoin chooses to challenge your assertion:

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This should be directed at the author Sean Williams of “The Motley Fool”. It’s nice to see traditional fiat-based investment blogs take crypto seriously. Unfortunately, they tend to misunderstand a number of fundamental tenets of crypto, which cause their conclusions to skew in weird directions.

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the flappening???

its here…

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Ive been a subscriber to motley fool for awhile, not to mention several industry othre ones like this. THey are all basically the ICON thread here. Nobody knows shit until one of them gets lucky and they are heralded as the next nostrodamus until they mess up their next prediction. It’s all guessing, maybe educated guessing but its still guessing. One thing I like about the Motley Fool is their disclosure policy. It would be nice to see all official news outlets do that.

Sean Williams has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool has a disclosure policy.

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How brief was Bitcoin considered a medium of exchange? Except for a brief time when people were trading it by the thousands for pizza, it’s mostly been a speculative asset. I hope Max Keiser is correct and it transitions to a storage of value and a strategic reserve for central banks.

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Looking in from outside the bubble, Bitcoin seems to be the only thing to hold, if crypto is even worth holding at all. Try to explain investing in ETH, NEO, ICX, EOS,… to a normal person, and you’ll get a cross-eyed look of wtf.

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Yeah,“normal” people are not a good gauge of where to put money,normal people usually scoff at innovation,new trends,etc. until everyone and their mother is into them.

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wasn’t my article / post… :slight_smile:

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Interesting article, thanks for sharing. Could happen.

Darcy C

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I think Litecoin is the testnet of Bitcoin
Charlie Lee said LTC is kind of BTC but for small transactions

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LTC to $10,000 usd :smiley: … Why? Adoption, Charlie… Bitcoin has no leader, no one to round up the support. LTC has Charlie, someone we can hear talk. And he has been mostly honest. Except for that one interview where he complained about LCC premine and didn’t mention he also premined. But we are not all prefect. He is grumpy another project was created with Litecoin in the name, although litecoin cash never went after to claimed to be better than litecoin. Just different.

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NEWS BRIEF: Billionaire Twins Set Sights On Litecoin

Litecoin Price Action Update & Some LTC News

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Vertcoin should replace both since it’s better in every technical aspect.

That’s why I own many, many vertcoins :slight_smile:

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I love LTC, it’s not a sexy project, but it could be among the first to achieve mainstream adoption.

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The article is from a theoretical perspective. And those same points are the reasons why many people invested in LTC between Dec-Jan. However, from a practical and realistic standpoint, the coin has been stagnant like XRP, and Charlie Lee is just freaking bored and possibly given up.

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