Litecoin (CCC:LTC-USD) is one of the first major cryptocurrencies as a peer-to-peer (P2P) coin by Charlie Lee in 2011. As a result, it is one of the first true Bitcoin rivals (CCC:BTC-USD). Lee invented Litecoin using many of the same concepts as Bitcoin, but with the goal of making it more efficient and helpful in everyday transactions. Bitcoin, as investors have discovered, maybe rather clumsy for little transactions.
Litecoin rose to an instant hit. In 2013, the price jumped from $3 to nearly $35. After then, it faded away, returning to the $3 to $5 range for several years. It awoke again in 2016, nevertheless. By the next year, it had risen to a mind-boggling $350.
Of course, things didn’t get any easier after that. With the subsequent crypto meltdown, Litecoin dropped below $40, then soared to almost $400, temporarily surpassing its 2017 peak. However, LTC has not been spared by the latest downturn. The price has dropped to slightly around $200.
So, here’s what you should do with Litecoin as we move further into 2021.
Litecoin: Efficiency Could Pay Dividends
Litecoin differs from Bitcoin in various ways. After all, Lee designed Litecoin with the express purpose of improving on the BTC architecture.
For starters, Litecoin has a quicker block period, with miners receiving rewards every 2.5 minutes rather than every 10 minutes. This enables speedier transaction times and significantly increased network capacity for payments and transactions.
In addition, the mining setup for LTC is different. Litecoin promotes graphics card mining over Bitcoin’s processor-intensive architecture because it uses a different algorithm. Regardless, as the value of Litecoin has increased, mining it on regular PCs has gotten more challenging. As a result, the advantages have been decreased to some extent. Nonetheless, LTC’s supporters may make some convincing assertions that their platform is more efficient than BTC’s.
Elon Musk slammed Bitcoin’s high energy intensity earlier this month, bringing this potential advantage to light. Tesla (NASDAQ:TSLA) has unexpectedly ceased accepting Bitcoin for car purchases, citing Musk’s warning about Bitcoin’s high power use, notably from the coal sector. This has opened the door for Litecoin and other efficiency-focused competitors to nibble into Bitcoin’s market dominance.
Where’s the Market Adoption?
Litecoin, as you can see, has a lot going for it. It’s been listed on major cryptocurrency exchanges like Coinbase (NASDAQ:COIN) for years and is now a decade old. Charlie Lee, the company’s creator, is a well-known personality in the crypto industry. Plus, during the first large cryptocurrency bull run in 2017, its price skyrocketed.
However, this also means that Litecoin has had several opportunities to leave its mark. Despite this, it hasn’t gained popular acceptability. Despite being a crypto allegedly built for ease-of-use for payments, the currency has relatively few big-name retailers or other collaborations.
Overall, Litecoin has dropped to 15th place in the cryptocurrency market capitalization rankings. That’s not awful, but LTC was in the top five for a long time. It is now being overtaken by a growing number of enterprises with more promising futures.
True, some people still trade Litecoin because of its brand name. Cryptocurrencies, on the other hand, change over time. In this changing ecosystem, it’s far from guaranteed that LTC will continue to stand apart.
The cryptocurrency community has already forgotten about Litecoin. That is, on the one hand, a benefit. It’s well-known, and it’s mentioned on a number of forums. There’s still some first-mover advantage available.
However, LTC lacks the luster of younger, more promising ventures. This name must be adopted at some time or it will become obsolete.
This year, LTC just missed setting a new all-time high before collapsing. In comparison to other legacy currencies like Bitcoin, Ethereum (CCC:ETH-USD), and “jokecoin” Dogecoin, this is a dismal performance (CCC:DOGE-USD). All three of these brands significantly outperformed their previous highs.
Some of the blame may be on Lee himself. He notably sold or gave all of his Litecoin after the cryptocurrency’s first significant run-up in 2017. Shortly after Lee’s sales, the price of LTC plummeted. It’s no surprise that Litecoin has underperformed in recent years, with the founder cashing out and the currency struggling to stay up with new challenges.
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