Litecoin (LTC) is a cryptocurrency that aspires to serve as a digital payment system alternative.
When Bitcoin (BTC) was first introduced in 2009, the blockchain technology that underpins it was revolutionary. By recording transactions in a tamper-proof blockchain database, it claimed to eliminate the intermediary in all sorts of transactions.
Blockchain is simply a complex database consisting of interconnected blocks. Bitcoin is virtual money that makes use of technology. That implies you may send money to someone without having to go through a bank or other financial organization. In principle, blockchain has the potential to completely transform the way we manage money.
However, Bitcoin has not evolved into the digital currency that many people expected it to be in the last 12 years. It’s been a long time. And, while it has progressed in the direction of general acceptability, it still has a long way to go.
As a result, a slew of other, less-complicated currencies, such as Litecoin, have emerged. Litecoin is lighter and speedier than Bitcoin, as its name implies. Its average transaction speed is a third of Bitcoin’s.
Litecoin basics
Litecoin’s creation was to complement Bitcoin and is based on the same technology. LTC is frequently used as a testbed by Bitcoin developers.
- What it does: Litecoin is a cryptocurrency that is supposed to be more scalable and faster. While Bitcoin is becoming known as a digital store of wealth, Litecoin aspires to be a digital currency that can be used for everyday expenditures.
- Management team: The Litecoin Foundation, located in Singapore, is responsible for the cryptocurrency. Charlie Lee, who designed the coin, is its managing director.
- Date launched: 2011.
- Market cap: $11.6 billion (CoinMarketCap, June, 2021).
- Availability: You can buy and sell Litecoin through most major U.S. cryptocurrency exchanges.
Should you buy it?
Let’s take a look at whether you should purchase Litecoin before we get into whether you should buy cryptocurrencies at all.
Cryptocurrencies are risky investments that have yet to be proven. The whole sector is rife with ambiguity, particularly in terms of how it will be governed. You may profit handsomely by betting on cryptocurrency. However, you risk losing your entire investment. As a result, it’s best to invest only money you can afford to lose and keep high-risk investments like cryptocurrency to a tiny part of your entire investment portfolio.
The question of whether you should invest in Litecoin boils down to whether you believe it has long-term potential.
There are already over 10,000 cryptocurrencies in circulation, with a majority of them being used for digital payments. When you start looking at digital currencies, you’ll see that they’re all aiming to tackle various problems. Several of them want to improve Bitcoin’s capacity to function as money.
Personally, I believe that some type of digital currency will become widespread in the near future. The key concern is how digital currency implements. It’s tough to say if one coin will dominate the market or even which way the market will move right now.
The following are three scenarios that might occur.
Altcoins
There has been a slew of Bitcoin competitors (altcoins) that promise quicker transactions and reduced costs. Litecoin, XRP (XRP), Bitcoin Cash (BCH), and Zcash are among them (ZEC). Which of these coins (if any) will win merchant acceptability remains visible.
Stablecoins
One of the major stumbling obstacles to Bitcoin’s usability as a currency is its volatility. Bitcoin has lost about half of its value in the previous few months, albeit it has recently risen marginally. It’s difficult for businesses and consumers to deal with a currency if they don’t know how much it will be worth on a given day. Stablecoins solves this part of the problem, which ties to something less volatile, such as the US dollar or a commodity. They provide the benefits of digital currencies without price volatility.
Government-backed digital currencies
The government of the United States and others are considering developing their own digital currency. China is now testing a digital yuan, while the Federal Reserve has stated that it is exploring a digital dollar. If individuals begin to use digital dollars, cryptocurrencies like Litecoin may find it even more difficult to gain public acceptance.
As you can see, there is a lot of rivalry for Litecoin. It’s been around for ten years, therefore it is old in crypto terms. On the one hand, this implies that it has a proven track record. Newer cryptocurrencies, on the other hand, have significantly improved Bitcoin’s capabilities. Some people have created whole new blockchains that are both environmentally friendly and scalable.
As digital money, Litecoin has a chance to prosper. However, it’s also worthwhile to investigate the other participants in this field.
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