On december 8th the market finally recalled that Litecoin existed and that it was seriously slacking behind other Tier 1 crypto currencies.
Litecoin protocol is substantially the same as Bitcoin's, with two major differences which every investor should at least be aware of:
My personal preference, after digging into the technical details (as primary job I'm a Software Engineer), is for Litecoin, for reasons that go beyond the scope of this article to explain.
Despite these differences anyway, Litecoin's value has been clearly dominated by Bitcoin's. But to which extent? I've observed two type of movements when comparing the trading value of Tier 1 cryptos, together with the relative value LTCBTC. I picked one example for each type and highlighted them in the chart as "Case 1" and "Case 2".
In "Case 1", Litecoin's value is moving independently from Bitcoin's, and this can be observed in the upward increment of LTCBTC, while in "Case 2" the change is merely a reflection of what happens to Bitcoin and thus to the global crypto market in general, these result in sideway movement of LTCBTC.
So we are insterested only in "Case 1" type of movements, because when investing in Litecoins we are hoping to gain more than what we would have gained if we invested in BTC. And why is that? Because the risk is the same, if Bitcoin were to crash, you can be sure Litecoin would crash as well. So it only makes sense to invest in Litecoins if we are convinced we will observe several "Case 1" type of movements.
When and whether the market will accept Litecoin as a better crypto currencies is impossible to predict, so I will simple break down four possible outcomes when investing in Litecoin:
1) Bitcoin grows or shrinks while Litecoin reflects the movement, very likely but neutral outcome.
2) Bitcoin grows or sideways while Litecoin shrinks, negative outcome, but I believe this outcome very improbable.
3) Bitcoin shrinks or sideways, and Litecoin grows, good profits.
So the expectation is to actually profit more from Litecoin than Bitcoin, while sharing the same risk.
I'm totally convinced of Litecoin's technical superiority, but what will be the market's perception in the close future? I welcome your opinions on this.
Litecoin protocol is substantially the same as Bitcoin's, with two major differences which every investor should at least be aware of:
- 1) Modified blockchain parameters allow more litecoin currency units to be generated at a faster pace, which also means shorter transaction processing speed (2.5 minutes vs 10+ minutes for Bitcoin)
- 2) Different hashing technique, which result in different hardware requirements to be able to do the mining (so ASICs optimized for Bitcoin won't work well with Litecoin and viceversa).
My personal preference, after digging into the technical details (as primary job I'm a Software Engineer), is for Litecoin, for reasons that go beyond the scope of this article to explain.
Despite these differences anyway, Litecoin's value has been clearly dominated by Bitcoin's. But to which extent? I've observed two type of movements when comparing the trading value of Tier 1 cryptos, together with the relative value LTCBTC. I picked one example for each type and highlighted them in the chart as "Case 1" and "Case 2".
In "Case 1", Litecoin's value is moving independently from Bitcoin's, and this can be observed in the upward increment of LTCBTC, while in "Case 2" the change is merely a reflection of what happens to Bitcoin and thus to the global crypto market in general, these result in sideway movement of LTCBTC.
So we are insterested only in "Case 1" type of movements, because when investing in Litecoins we are hoping to gain more than what we would have gained if we invested in BTC. And why is that? Because the risk is the same, if Bitcoin were to crash, you can be sure Litecoin would crash as well. So it only makes sense to invest in Litecoins if we are convinced we will observe several "Case 1" type of movements.
When and whether the market will accept Litecoin as a better crypto currencies is impossible to predict, so I will simple break down four possible outcomes when investing in Litecoin:
1) Bitcoin grows or shrinks while Litecoin reflects the movement, very likely but neutral outcome.
2) Bitcoin grows or sideways while Litecoin shrinks, negative outcome, but I believe this outcome very improbable.
3) Bitcoin shrinks or sideways, and Litecoin grows, good profits.
So the expectation is to actually profit more from Litecoin than Bitcoin, while sharing the same risk.
I'm totally convinced of Litecoin's technical superiority, but what will be the market's perception in the close future? I welcome your opinions on this.