Bitcoin and Litecoin, both cryptocurrencies formed in the last few years have had an interesting trading week. Aside from going up over 100% in a few days, both crashed spectacularly, something being referred to as Black Wednesday. You can see our past coverage of both here, here and here.
Now the task is on hand to repair both to stable levels, but an opportunity has been missed where a true successor could be reversed. Litecoin thus far has only operated as a fraction of Bitcoin’s market cap, however many people are claiming, as well as supporting the fact that Litecoin has many advantages over Bitcoin.
Transaction times on average are a quarter of the time faced by a Bitcoin transfer, as well as having over 4 times as many ‘minable’ coins. So how do these prove so vital? Well in a growing world and economy having such slow transaction times takes a step back from the evolution of banking. The population cries for quicker processing times, and Litecoin can help on this front. Having four times as many minable coins also helps lower the effect of particularly large coin holders affecting the market, as seen in the last few days. You many have read of the recent headline where it was claimed, the Winklevoss Twins of Facebook fame held 1% of all Bitcoins in circulation. Bitcoin always faced the problem whereby the currency was often controlled by early investors, often contradicting the decentralized currency. However Litecoin had a strong following from the start, meaning no one person can control markets with such volatility as Bitcoin.
Many of the community will be aware of Bitcoin’s ASIC and FPGA problem. A few companies and individuals have built custom rigs which could create the coins at an unprecedented amount. This was exploited due to the cheap hardware that could take advantage of the SHA256 hashing algorithm Litecoin on the other hand requires the use of SCRYPT, which is very memory intensive. The result means that the cryptocurrency is safe from such ASIC or FPGA mining rigs, at least until the prices of DDR memory lower drastically.
With Litecoin hitting $5 dollars recently, many think that this gives the currency hope in succeeding Bitcoin and hopefully driving the price to new heights. While good for investors it gives the currency a boost for creating new services and products.