2021 has certainly been a good year for cryptocurrencies. Top cryptocurrencies like Bitcoin and Ethereum have been making spectacular gains and altcoins are not lagging as well. One such altcoin with rapid growth is Litecoin (LTC). Litecoin is one of the oldest and most prominent altcoins in the market.
But does that make it a good investment? What are the pros and cons of investing in Litecoin (LTC)? Can the advantages of investing in Litecoin outweigh its potential drawbacks? Most crucially, will the token become a millionaire-maker like Bitcoin or the meme coin Doge? Keep watching this content to find out! Hi guys and welcome back to Crypto University. In this content, we are going to discuss Litecoin in detail and answer all your inquiries. Before we go further, why don’t you click on the like button? You should also subscribe to this website while you are here.
LITECOINS HISTORY Everyone knows the first cryptocurrency to be ever created was Bitcoin and it was founded in 2009 anonymously by Satoshi Nakamoto. However, very few are aware that there exists a version literally like Bitcoin, that is based on the same fundamental network protocol and blockchain technology, only much lighter and faster. Four times faster. The name? Litecoin, of course! Often referred to as the silver to Bitcoins gold, Litecoin is one of the most popular altcoins in terms of market cap and one of the most prominent forks of Bitcoin.
Launched just two years after Bitcoin (that’s 2011 by the way if you’re wondering), by former Google employee Charlie Lee, Litecoin was created to serve as a lighter version of Bitcoin. Well, with a four times higher supply and four times faster processing times, Litecoin is no doubt an appealing alternative to Bitcoin and a golden opportunity for investors. While Bitcoin is still the most prominent crypto in terms of adoption and market cap, Litecoin is a preferred choice for many savvy investors. In fact, with a market cap of $22,207,103,022 at its all-time high, LTC has cemented its spot in the crypto market.
Believe it or not, according to data, there are more than 283 Litecoin addresses with over $1 million LTC in each, which shows that many big investors are already deeply invested in Litecoin. What are the benefits of investing in Litecoin?
With low block generation times, improved Graphic User Interface (GUI), and impressive trading potential, Litecoin is one of the top 20 cryptos (currently ranking 14th in terms of market cap) for a reason. That’s right! There are many reasons to invest in Litecoin, so let’s explore the factors that give LTC a competitive edge in the cryptocurrency sector.
So here’s a quick look at the pros of investing in Litecoin. Litecoin is an open-source network: One of the main advantages of investing in Litecoin is the fact that Litecoin is an open-source system, which means that changes to its protocol can be implemented easily. Note that changes are usually implemented to respond to the crypto market and its needs.
Being an open-source system also gives flexibility to Litecoin to implement tech innovations, such as SegWit and the Lightning Network protocol to make transactions faster and more convenient. Litecoin is decentralised: Just like other cryptocurrencies, Litecoin is a peer-to-peer network and a decentralised alternative to fiat money, which means that users don’t have to rely on third parties, central banks, or authorities. Nodes are spread across the globe and the network is open to people from all walks of life.
As a result, intermediary fees are eliminated and the risk for manipulation of prices is reduced. Litecoin is fast: Perhaps one of the most important pros of investing in Litecoin is its speed. Compared to Bitcoin, Litecoin is four times faster. Litecoin processes transactions within 2.5 minutes, while with Bitcoin, it takes up to 10 minutes to process payments. Some claim that faster processing times also mean that the risk of potential attacks is lower – simply because hackers would have less time to attempt double-spending attacks.
Litecoin is scalable: Another major advantage of Litecoin is its scalability. Litecoin can process 56 transactions per second. In comparison, Bitcoin can handle 7 transactions per second, while currently, Ethereum can process 15 transactions per second. Low transactions fees: Litecoin has relatively low transaction fees, especially when compared to other cryptocurrencies or traditional payment systems. This is a major factor that can make LTC adoption wider and smoother. Litecoin has been improving regularly since it was launched: As stated above, Litecoin is a flexible network that has embraced numerous improvements, such as SegWit and the Lightning Network protocol to make transactions faster and easier.
Interestingly, Litecoins creator Lee once said, Think of it being two highways: Today, Bitcoin is packed full of cars and Litecoin is empty. Even with Bitcoin packed, the cars are not coming to use the Litecoin highway today because it’s not connected and it’s inconvenient (centralized exchanges and slow on-chain transfers) to go across.
Lightning Network will build bridges over the highways. Litecoin has an upper limit of total coins: Litecoin has an upper limit of 84 million coins, which is four times bigger than Bitcoin. This means that the risk of inflation is eliminated, while investors will have plenty to invest in. The straightforward process of mining: Just like Bitcoin, Litecoin uses a proof-of-work algorithm; Litecoins algorithm is known as script.
Compared to Bitcoin, however, Litecoins mining algorithm makes mining more energy-efficient and accessible to miners, which is also a major pro in environmental terms. Litecoin has a trustworthy developer team: Because Litecoin was created by a former Google employee, that brings a sense of reliability. And as stated above, Charlie Lee and his team are developing LTC regularly, including wallet improvements, confidential transactions, and partnerships. Litecoin is easy to trade: Finally, a major advantage Litecoin holds over other altcoins is the relative ease of transactions.
It’s very easy to trade LTC. Many exchanges support Litecoin, and all hardware wallets also support Litecoin with atomic swaps between LTC/BTC available. On top of that, because of its lower price compared to other top coins – with almost zero transaction fees and lower volatility levels – LTC is an attractive option for beginners looking to invest in the cryptocurrency sector. Cons of Investing in Litecoin Despite its pros, investing in Litecoin has some drawbacks.
If you’re looking to put your capital into Litecoin, it’s the only fair you should be familiar with the cons of investing in Litecoin before making your decision, isn’t it? So here’s what you should know about the risks of investing in Litecoin. Litecoin has some branding issues: Being a fork of Bitcoin, many people think that Litecoin is the same as Bitcoin, which is one of the major cons of investing in LTC.
On top of that, though Litecoin revolutionized the crypto sector by improving Bitcoin, its uniqueness is kind of declining. To provide an example, Bitcoin has also embraced the SegWit protocol, chipping away at Litecoins advancements and prestige. Litecoin has lost its credibility over time: Although Litecoin has a trustworthy developer team, LTC has lost some of its credibility. One of the most devastating headlines for Litecoin investors in recent years came in 2017 when Lee announced he had sold all of his Litecoin.
Lee timed the sale nearly perfectly, announcing it in December 2017 within weeks of the market top. Lee said he sold his stake so he could not be accused of manipulating the Litecoin market. He said it was a conflict of interest for him to tweet about Litecoin when he owned such a large stake in it and was such an influential voice. Even if his reasons for selling were admirable, it doesn’t instill confidence in the crypto when the founder dumps all of his holdings. Litecoin is one of the most popular coins on the Dark Web: A study published in 2018 announced that Litecoin is the second-most used on the Dark Web, with 30% of underground vendors accepting Litecoin.
This can be a major drawback for big investors and ordinary users, especially since the Silk Road and the illicit transactions often carried out there has long since haunted the image of cryptocurrency. Some investors are not comfortable with the idea that the same Litecoin they hold is currently being used to purchase drugs and illegal ammunition. While this reaction is a bit bizarre, it is also somewhat understandable.
You should consider this before making your decision to invest in the coin. Litecoin is one of the oldest cryptocurrencies that has proven time and time again that it is one of the most desired assets among crypto investors – an asset that is ranking 14th in terms of market cap. Plus, the current price of LTC acts as a low barrier of entry for crypto newcomers and also as a great way to diversify one’s portfolio, which may facilitate its adoption worldwide.
However, Litecoin certainly has some risk factors; Charlie Lee sold his holdings in 2017, many people still associate LTC with BTC, and Litecoin is becoming more obsolete in terms of technology when compared to Ethereum and other blockchain projects. At the end of the day, the decision to either invest or not in Litecoin boils down to the risk/reward ratio. Put simply, Do potential rewards outweigh risks? To some, Litecoin looks like a low-risk investment with lots of potential rewards.
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