Is Litecoin Giving Bitcoin a Run for its Money?
This question has been on the minds of many players in the cryptocurrency industry. Ever since its introduction, Bitcoin has always been at the top. This can be explained by the fact that it was the first digital currency presented to the public. Consequently, Bitcoin has gone ahead to set the bar for virtually all types of digital currencies that have come after it. Bitcoin also has the highest market share and value of in the alternative currency section.
Litecoin has firmly taken the number two slot in the alternative currency industry. At some point, its fate seemed to be tied to that of Bitcoin. When Bitcoin appreciated in value, the same happened to Litecoin. If Bitcoin’s price dropped, so did that of Litecoin. This trend became predictable and familiar. Litecoin showed that it could keep up with the pace, but just could not gain any further ground on Bitcoin.
A change of fortunes
In 2014, the predictable trend changed. Litecoin and Bitcoin have been exchanging the lead periodically. It is worth noting that experts in the cryptocurrency industry have an interesting view of things. They have pointed out that the best days of Litecoin lie ahead. The rise of Litecoin can be explained by the following factors:
Value Increase
In the last year or so, the value of Litecoin has increased phenomenally. A comparison done by Forbes magazine is testament to this. According to this comparison, between January 1, 2013, and January 1, 2014, the value of Litecoin increased an impressive 328 times. During the same period, the value of Bitcoin also saw a fifty-fold increase in its value. The superior results of Litecoin meant that investors went for it. Litecoin had and continues to have a higher rate of return when compared to its counterpart.
Ease of the Mining AlgorithmsLitecoin employs Scrypt algorithm in mining. It is not easier or faster than the SHA-256 algorithm that is used by Bitcoin, but it relies heavily on RAM calculations, with RAM being the most expensive component of ASIC designs to date. This means that investors can use fewer resources and energy to mine Litecoin. The SHA-256 algorithm has to be used with hardware that has been specifically designed for mining. But at the moment of writing some number of Litecoin ASIC miners are already in development or have been developed, making GPU mining of Litecoin highly unprofitable or very close to it.
Transaction Turnaround Time
Faster mining is important. Because Litecoin mining is faster, it leads to more rewards and this translates to increased profitability for the miners. The miners will also have to wait for a shorter period of time for verification and approval of their transactions.
Bitcoin’s Bad Publicity
Bitcoin has suffered bad press recently. First, the exchange collapses that were experienced some time back were disastrous. Secondly, a few rogue investors used the currency to carry out illegal transactions. Litecoin is not immune to any of these downfalls. Even so, the fact that these misfortunes have not befallen Litecoin means that its reputation is only partially affected by them.
Cryptocurrency offers a means to buy, sell and also invest. This is done while avoiding the banking systems and government oversight. Your money is not tracked. In an economy that is prone to destabilization, this system of investment presents a stable force.
In 2013, Bitcoin received a great degree of media coverage. However, it is facing a number of challenges in India and China. This, coupled with the factors mentioned above position Litecoin as a better investment option. Furthermore, the market has seen the introduction of mining computers. These have been designed specifically for Litecoin mining. These computers will go a long way in enhancing the cryptocurrency industry. Alpha Technologies recently unveiled their ASIC machines that are Litecoin specific. They went on further to state that they were taking pre-orders for the same.
Anyone seeking to invest in the cryptocurrency market stands a better chance of success by investing in Litecoin. This is because of its affordability, ease of mining and return on investment. This is the best bet for the future in as far as the alternative currency market is concerned.
UPDATE:
We have changed some of the inaccuracies in this article. Thanks to the vigilant community members for pointing them out!
