(1) Litecoin relies on the same principles as Bitcoin: Proof of Work. The hashrate is high enough to prevent attacks from outsiders.
Disclaimer: some might point out that more than 50% of the hashrate of Litecoin comes only from four different pools at the moment ( litecoinpool DOT org/pools ). This is true, but this is also the case for Bitcoin, where the situation is even worse: only two pools control 50% of the hashrate of Bitcoin ( DOT blockchain DOT com/pools ). As they have the same technicals, they share the same problem regarding the hashrate distribution; when ASICs are developed, it makes mining less accessible to the average joe. Big investors, who are usually pooling together, end up taking huge shares of the hashrates. While this is an obvious issue if those mining farms ended up being controlled by malevolent people, it is not Litecoin-specific and Bitcoin suffers from exactly the same possible problem.
(2) The hash algorithms of Bitcoin and Litecoin are different. It is important for two reasons. A. Bitcoin miners cannot use their hashrate to attack the Litecoin blockchain, if for example they thought that Litecoin was threatening for Bitcoin. B. If there was a successful conspiracy against Bitcoin, where a malevolent entity took control of the biggest Bitcoin mining pools, it would not affect Litecoin. They would only be able to destroy Bitcoin and eventually the coins which share the same hash algorithm as Bitcoin. There is obviously more incentive to try to destroy Bitcoin than Litecoin or any other coin for an entity willing to do so; therefore, if that scenario ever were to unfold, Litecoin would survive it and become de-facto the new Bitcoin as it shares the same fundamentals and reliability as Bitcoin, while not being affected by Bitcoin-hashrate-specific attacks. Litecoin is Bitcoin’s plan B.
(3) Litecoin is intrinsically faster than Bitcoin. On average, there will be 1 confirmation every 2.5 minutes, while there is 1 confirmation every 10 minutes for Bitcoin on average. It leaves the choice to the users to have more flexibility on how many confirmations they require, depending on situations. With Litecoin, there is at least the possibility for transactions to be accepted in less than 2.5 minutes, while for Bitcoin, it is not a possibility to wait for less than 10 minutes minimum. Disclaimer: some people might point out that you can accept a transaction with 0 confirmation, which is instantaneous. While this is true, 0 confirmation is dangerous to accept for two reasons: first, it is very easy to double spend it, as it is unconfirmed yet. 1 confirmation, while not the safest option, is still way safer than 0 confirmation. Second, for a 0 confirmation transaction, it could never be processed with no fault of the sender, if for example they put a fee which was too low, and the transaction would be stuck for a (very) long time until a miner eventually accepts that low fee. There is no guarantee about when that transaction would become safe. On the other hand, 1 confirmation means that the transaction was confirmed and processed with the fee accepted by the miner, which means that in the case of Litecoin, we now know for a fact that on average, every 2.5 minutes, the transaction will be safer and safer with more confirmations adding up. When buying something where 1 confirmation is acceptable, such as a coffee, the cashier and the people behind would certainly wait for 2.5 minutes for 1 confirmation for Litecoin; would they wait for 10 minutes with Bitcoin ?
(4) Litecoin was not premined, did not start with an ICO, did not give any advantages to some people or the other to mine or acquire it first. As the concept of crypto-currency got to be a little bit more known when Litecoin started, it can be argued that the initial mining of Litecoin was in some way fairer than Bitcoin’s; more people had access to the “know how” of how to do it, compared to the time of the launch of Bitcoin. It is hard to estimate how many coins Satoshi Nakamoto (the creator of Bitcoin) owns, but we know that he did not sell them yet and that he would be one of the richest men in the world if he sold them ( celebritynetworth DOT com/articles/entertainment-articles/satoshi-nakamoto-richest-people/ ). If any of the coins which we attribute to him ever moved, people would probably panic about the massive amount of Bitcoins which would get sold. On the other hand, the creator of Litecoin, Charlie Lee, publicly said that he sold and donated his Litecoins ( DOT cnbc DOT com/2017/12/20/litecoin-founder-charlie-lee-sells-his-holdings-in-the-cryptocurrency.html ). There is no fear of a massive dump of the creator of Litecoin.
(5) Litecoin’s creator is known. This may sound like a disadvantage at first, but Charlie Lee has a good reputation, worked for Google and Coinbase, and graduated from the MIT … He is an “honest” and “smart” public face, which many people need to adopt a project, even though we know that it is decentralized. Many people struggle enough with Bitcoin’s unfriendliness, nerdiness and the fact that it is intangible, they even need to navigate between the different scams, forks (Bitcoin cash for example) and there is no clear leader who can tell “This is Bitcoin”.
(6) Litecoin’s supply is limited, in the same way as Bitcoin, although there will be 4 times more Litecoins available in total. Almost 80% of the Litecoins have been mined yet, meaning that there aren’t that many coins left already. As time goes on, the lesser the supply, due to halving, but also due to people losing access to their coins.
Litecoin was created 9 years ago, in October 2011. It has proven to be solid and reliable to similar levels as Bitcoin. In fact, Litecoin is technically more reliable than Bitcoin, because Bitcoin suffered from two incidents: a Value overflow incident in August 2010 ( en DOT bitcoin DOT it/wiki/Value_overflow_incident ) and a Chain Fork Post-Mortem in March 2013 ( github DOT com/bitcoin/bips/blob/master/bip-0050.mediawiki ). Those two incidents meant for Bitcoin to have been functional for “only” 99.986% of its existence since 2009 ( buybitcoinworldwide DOT com/bitcoin-uptime/ ). On the other hand, the Litecoin uptime is of 100% ( twitter DOT com/satoshilite/status/1016314884705800192?lang=en ).
(1) Litecoin has always remained consistently in the Top 10 of all the crypto-currencies since 2013 (probably since before that too, but the source doesn’t go beyond 2013 coinmarketcap DOT com/historical/ ). The coin has always been trusted with a lot of capital, in good and in bad times.
(2) Litecoin has been useful for Bitcoin many times to test new features. Litecoin has enough value to be a good enough “honeypot” for hackers to test the reliability of new features. Disclaimer: Some people may say that there is already a Bitcoin testnet. While this is true, there is no financial incentive for hackers in this case to hack the new feature in the testnet. For example, for the Segregated Witness (SegWit) update, one Litecoin user put the equivalent of 1 Million dollars in a SegWit address to see if anyone could hack it ( DOT reddit DOT com/r/litecoin/comments/6azeu1/1mm_segwit_bounty/ ).
(1) Litecoin is mostly being ignored. There is no pump and dump initiated by the tweets of some people. When people mention what to buy, they don’t mention Litecoin. This is very good, because it means that Litecoin has a huge margin of progression to get known and loved. When the price rises, we know that it is not temporary.
(2) Litecoin will ultimately become well-known, simply because it has a face: the face of Charlie Lee. No-one can bear the face of Bitcoin except Satoshi. Whenever someone will want to speak about Bitcoin seriously (a TV show host, a billionaire …), Charlie Lee will be one of the first few people in their mind. He is also not saying “everyone buy Litecoin”, he always say to first buy Bitcoin. He is the opposite of a scammer who looks to pump his coin.
(3) Litecoin is on almost every major exchanges. If it is not yet as popular as some temporary pump and dump altcoins to the moonboys, it is very popular to those moving money around exchanges, in a faster and cheaper way.
(4) Litecoin is a classic part of the portofolio of institutional investors in cryptos, such as Grayscale ( grayscale DOT co/litecoin-trust/ ).
(5) Paypal … are starting to implement it ( paypal DOT com/us/smarthelp/article/what-do-i-need-to-know-about-litecoin-faq4401 ).
(6) The fees remain very low, even when it gets more known. It is possible to send massive amounts of money for very cheap, very fast and yet benefit from a lot of safety.
While remaining decentralized, it is way easier to implement new features in Litecoin than in Bitcoin. The first step of a significant improvement towards privacy, which is called MimbleWimble, is coming very soon.
Some people may say that Litecoin HAD value, but that it got killed with the lightning network on Bitcoin. To that, I will answer one simple fact: the lightning network is far from being: A. ready, B. usable and C. adopted.
A. and B. : It is very easy for someone using the lightning network, through no fault of their own but simply because they were slightly out of sync, to lose every coin they had in it. This is due to the need to punish malevolent people from trying to steal funds. To make it simple, if somebody decides to close their lightning channel but that some information is not accurate (for example, they are out of sync), then the mechanism is that they are punished by having all their coins confiscated. While this is a deterrent for those trying to make false changes, it can hurt those who either made a mistake, or just closed their channel while not being at the latest sync update of the network. It is not advisable to use the lightning network except for trying it out with a few satoshis.
C. : At the moment of writing, the total amount of Bitcoins in the lightning network is nearly 1100 BTC, with 17 000 nodes and 38 000 channels, and more than 50% of those coins are in the united states alone ( 1ml DOT com/ ). Therefore, it currently lacks serious adoption.
(1) It is still possible to buy a whole Litecoin at current prices for most people. Many of the people who do not understand crypto-currencies certainly imagine that you can only buy “1” Bitcoin only, and not 0.001. And even those who know it, they would certainly rather have a whole coin of Litecoin than a fraction of a Bitcoin psychologically speaking.
(2) If the market put the same value for all coins, all other things being equal, then 1 Bitcoin would be worth 4 Litecoins (or 1 Litecoin = 0.25 Bitcoin), because Bitcoin is limited to 21 million coins while Litecoin is limited to 84 million coins. The price of LTCBTC, in theory, could be 0.25. It is however something which we may not see while we are alive. Call me crazy, but it may however be the case in quite a few decades, when there would have been way too many Bitcoins lost and that the Bitcoin supply is simply too low for it to even be usable (If there is little to no supply, it is hard to price something). Litecoin, on the other hand, has got a userbase who got feedback early on and learned from the crazy Bitcoin stories of people losing thousands of coins in avoidable situations, and it would thus probably make sense that less people in Litecoin lost coins. There is also four times more coins than Bitcoin in total which will be available.
(3) Price in US Dollars has been increasing steadily. Unlike back in 2017 where it got to those price levels and above with crazy unsustainable wicks, this time Litecoin has been testing supports, resistances, doing some healthy corrections, but nevertheless is on an uptrend overall on the LTCUSD pair. The actual craziness/bull run has not really started yet, as Bitcoin reached 3 times its ATH while LTCUSD did not reach its ATH yet.
(4) It takes little money to make Litecoin fly with its current marketcap compared to Bitcoin. For Bitcoin price to increase by only 10%, the Bitcoin market cap would increase by 90 billion dollars. In contrast, if Litecoin marketcap increased by 90 billion dollars, the price would go up by nearly 9 times (an 800% increase).
(5) The volume of Litecoin versus its marketcap is massive compared to the volume of Bitcoin versus its marketcap. Whenever there are increases or decreases in prices for Litecoin, the price represents a healthy market, with a lot of buyers and sellers.
(1) At the time of writing this, BTCUSD is nearly 3 times its 2017 ATH. LTCUSD is not even at its 2017 ATH yet.
(2) At the time of writing this, the LTCBTC ratio is 4 to 5 times less than what it usually is when it reached the end of a pump cycle.
(3) MimbleWimble is on the way. The last time that such a significant implementation happened in Litecoin (with SegWit), the price went up by almost 10 times ( bitcoinmagazine DOT com/articles/litecoin-has-now-deployed-segregated-witness ).
(4) The long-term charts (1 week candles, 1 month candles) of LTCUSD are forming huge W pattern.
(5) The long-term charts of LTCBTC show that it bottomed to an ATL, and bounced, it is screaming for upside now.
Based on everything I wrote, and probably more things which I forgot to mention, I predict that LTCUSD could reach a few thousands dollars this year. I won’t start with Technical Analysis, but anywhere from 1000 USD to 2500 USD is not crazy. Anything above 3000 USD for this bull run remains a possibility, and would depend on external events/factors (such as an institutional and companies FOMO on Bitcoin). It sounds crazy. I also sounded crazy when I said it could reach hundreds of USD back when people were selling Litecoin at 3 USD and telling everyone to sell it all on the trollbox of Btc-e.
Why am I posting this now ? Because we got a correction, there are good entry points, and this seems to be a good time to hop on that train before a real alt season begins.
DISCLAIMERS: I OWN LITECOINS. THIS IS NOT FINANCIAL ADVICE. THIS IS NOT TRADING ADVICE. NEVER INVEST WHAT YOU CANNOT AFFORD TO LOSE. YOU ARE RESPONSIBLE OF WHAT YOU DO, I AM NOT. YOU SHOULD ALWAYS SEEK MORE INFORMATION AND PROFESSIONAL ADVISES WHERE APPLICABLE.
Seriously, guys. Be responsible. Sell some on the way up. You can always take profits and eventually buy back during a bear market if you want to get back some. Greed is real, make plans, and stick to them. Peace.
- A crypto and Litecoin enthusiast for many MANY years (This is a throwaway account. Do not expect any answer. You can screencap this, copy/paste it and share it if you want, I give up all copyright, rights or whatever bullshit laws about those are currently in use in your country).
Only time will tell … HODL