The crypto industry is bigger than ever, with many thousands of different coins for investors and traders to choose from. However, Bitcoin remains the industry’s largest and most valuable coin, as it has done since the advent of the technology.
Over the years, many coins have been tipped to topple Bitcoin, but none have managed to achieve it. Does Litecoin have what it takes?
We answer the question in the article below by analysing the Litecoin price and the future potential of the asset.
The technology that powers cryptocurrencies has developed considerably in recent years. Many of the coins being minted and released today offer far more than a mere alternative payment method. They can be used for things including the building and hosting of apps and smart contracts.
Released in 2011, Litecoin is among the oldest cryptocurrencies on the market today. Given its age, Litecoin is not equipped to offer some of the more modern crypto features. However, this isn’t necessarily a drawback.
Cryptocurrencies were designed as an alternative payment method, and there’s something to be said for assets like Litecoin that stay true to this founding principle.
Litecoin is particularly well suited for making transactions. It uses a proof-of-work (PoW) consensus mechanism, which requires users of the network to generate hash codes in order to validate new transactions on the chain. PoW systems are often regarded as archaic today, but Litecoin has a unique advantage.
Litecoin uses a special algorithm called Scrypt to generate hash codes. This algorithm means transaction validation requires less power. As a result, Litecoin can process up to 54 transactions per second. This is considerably more than Bitcoin, which can only handle seven.
With Scrypt, Litecoin has a clear advantage over Bitcoin and can process transactions far more efficiently. However, this doesn’t tell the full story. When discussing whether Litecoin can rival Bitcoin, we need to analyse the value and price history of the two assets.
With a current market cap of $5.25 billion, Litecoin is the 19th-largest cryptocurrency on the market. At the time of writing this article, Litecoin is trading at $70.92. The asset’s value has fallen by 0.01% over the past 30 days and by 18.69% over the past 12 months.
In comparison, Bitcoin is the largest cryptocurrency in terms of market cap, with a total of over $835 billion. It’s currently trading at $42,591.90, a value which has grown by 1.54% over the past month and by 104.14% over the past year.
This clearly demonstrates that, despite having an advantage in terms of transaction speed, Bitcoin is the more valuable asset by a considerable distance. Additionally, Bitcoin has shown positive growth over the past year, while the value of Litecoin has shrunk.
While Bitcoin is undoubtedly in a stronger position than Litecoin, things move fast in the world of cryptocurrency. It’s a notoriously unpredictable industry, and the status quo can change in the blink of an eye.
Litecoin investors remain hopeful that the asset can challenge Bitcoin, but are these aspirations realistic? Litecoin has clear technological advantages. Not just in terms of transaction speeds, but with lower transaction fees as well.
However, these attributes have failed to propel Litecoin to the top of the charts, and it has yet to pose a true challenge to Bitcoin.
Why is this? Much of it has to do with brand recognition. Bitcoin is a household name. Even people who know absolutely nothing about cryptocurrencies will have heard of Bitcoin.
This is incredibly important, especially for assets like cryptocurrencies which are struggling to achieve true mainstream integration.
Litecoin was once one of the industry’s largest coins but has since fallen away. To truly challenge for the top spot again, Litecoin must turn this around and reinvigorate its image in the eyes of traders, investors and the general public.
There are a number of other coins that could pose a more serious challenge to Bitcoin’s dominance. These include assets such as Ethereum, Tether, XRP and Cardano. These assets have higher market caps than Litecoin and are powered by technology far more advanced than Litecoin or Bitcoin.
Cryptocurrency is supposed to be the future of the financial world. The technology has developed so rapidly that these coins now offer a huge range of opportunities. They can be used to conduct highly secure payments and create apps and tools that can be implemented in decentralized digital ecosystems.
Bitcoin and Litecoin run the risk of being left behind by these technologically superior coins. If cryptocurrencies are indeed to be the future of payment processing, these technical advantages could prove instrumental.
Bitcoin and Litecoin both face challenges from a new generation of cryptocurrencies. However, if we’re talking about purely transaction-specialist coins, is Litecoin the most likely to challenge Bitcoin? With key advantages in transaction speeds and costs, it certainly seems to be on paper.
If Litecoin is to overtake Bitcoin, however, it would require a monumental collapse of the flagship cryptocurrency, one that doesn’t seem likely to happen any time soon.
Disclaimer: The above references an opinion of the author and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Invest responsibly and never invest more than you can afford to lose.
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