Although Bitcoin looms larger in the public consciousness, Litecoin is more developed in some ways. For example, Litecoin survived the implementation of “SegWit” (Bitcoin hasn’t…at least not yet). And to make matters worse, Litecoin mining pays 25 tokens for every block, while Bitcoin only pays 12.5.
These differences look small at first, but they could have outsize effects on the Litecoin price predictions. Later in this report, we’ll break down why SegWit is important, when Bitcoin might reach full activation, and whether the two can co-exist.
But for now, let me put my cards on the table. Here’s what I do not believe:
- I do not believe that Litecoin’s rise will crush Bitcoin.
- I do not believe that Bitcoin will crush Litecoin.
- I do not believe that either Bitcoin or Litecoin will crush Ethereum.
- I do not believe that Ethereum will crush Bitcoin or Litecoin.
Or to be more specific, I don’t think any of these things will happen in the next 12 months. We’re a long way from a winner-takes-all fight in the cryptocurrency market.
Right now, the industry is as sensitive as a newborn child. It kicks and screams at anything it doesn’t like, is intolerant of compromise, and can burst into tears at any moment (which is the equivalent of dropping 10% just to let off steam).
We have to wait till the industry grows up. Just like children transitioning to adulthood, the stark realities of the world will force adaptation and growth. Some will fall behind, turn sour, or quit. A successful few will hang on.
Will Litecoin be one of them? I think so.
Of the nearly 900 digital currencies that exist, Bitcoin and Ethereum are the ones most likely to survive, followed closely by Litecoin and Ripple. This is pretty much in line with the history of business, which shows us that industries find stability with three to four players.
At that point, perhaps we will see a winner-takes-all dynamic emerge among the various cryptocurrencies. Until such time, I think it is safe to assume that we’re playing a positive-sum game.
Litecoin Price History
Litecoin is one of the few cryptocurrencies with a market cap in the billions. Specifically, $2.16 billion. Its price went through the same boom and bust cycle as Bitcoin, almost exactly in tandem. Both currencies spiked in late 2013 before crashing viciously.
In terms of USD to LTC, you can argue that Litecoin is trading near its all-time highs. It is hovering in the $40.00 to $50.00 range at the moment, but it has a history of sharp movements. I remember one day in which Litecoin more than doubled.
That said, prices remained stagnant for much of 2014, 2015, and 2016. Then cryptocurrencies experienced a renaissance of sorts. Our Litecoin price prediction for 2018 was fairly downbeat in January and February, but then rumors started circulating that it would be freely traded on Coinbase. That changes everything.
Adding a Litecoin exchange was a spark that sent LTC prices skyrocketing. As soon as investors could buy Litecoin without the hassle of going through Bitcoin, its price skyrocketed 855%.
Some people claim that the relationship between Litecoin and Bitcoin is akin to silver and gold, respectively. So Bitcoin is gold, the reserve asset to money, whereas Litecoin is silver, the industrial metal with real-world applications.
Blockchain Technology, Bitcoin Mining, and Halvings
Maybe we should add context for investors that are less familiar with cryptocurrencies. Here’s a quick primer on blockchain, Bitcoin, and Litecoin.
The first thing you should know is that everything in the world of cryptocurrencies—Bitcoin, Ethereum, Litecoin, initial coin offerings, smart contracts—is less than 10 years old.
The technology that makes it all possible (otherwise known as “blockchain technology”) first appeared in a white paper by Satoshi Nakamoto. It showed that the Internet is less free than we think it is, because the Internet is connected by cables that run from our street corners to giant servers owned by the world’s largest technology companies.
Nakamoto showed the flaws in this “client-server” model. But unlike most people, he didn’t just drop the mic after delivering his critique—he actually did something about it. He devised blockchain technology, which is really similar to the Internet in that it uses a whole network of computers to stay alive. Here’s the difference though.
When you send an e-transfer, it runs from your computer to a server and then to its final destination (presumably one of your friend’s or colleague’s computers). In blockchain, a record of that payment is recorded on all computers simultaneously, but only you would be able to access it.
Well, you and the person you sent it to.
Access is granted by a unique “cryptographic” key. This method of transfer removes all the annoying middle men from your transaction. It is direct, secure, and frictionless.
But in order to use this amazing payments system, you have to use Bitcoin. The supply of Bitcoin is slowly increased through a process called “mining,” which is effectively what drew interest in the first place.
Imagine being able to set up your computers to crack some complicated mathematical puzzle and in exchange, you get bitcoins, which you’ll later be able to use for actual purchases. It’s the dream. You put in no real effort, apart from buying the computer and paying for the electricity bill.
That said, the reward for “Bitcoin mining” decreases as more bitcoins are added into circulation.
There is a specific moment, in fact, called a “Bitcoin halving.” Having experienced two halvings already, the reward for Bitcoin mining is down to just 12.5 bitcoins per block, which is significantly less than developers are getting for Litecoin mining.
Miners get 25 litecoins per block.
Does the Litecoin Potential Compare to Bitcoin?
I can almost feel some readers rushing to the comments section. Relax. I know that one bitcoin is worth more than 25 litecoins. That’s not the point.
We know that it’s possible for crypto values to make significant moves in a relatively short time frame, so don’t judge Litecoin prices on where they are today. Think about where they can be tomorrow.
Litecoin has the potential to mimic Bitcoin prices…but it will need a growth spurt in popularity for that to happen. Luckily, there is good news on that front. Owing to the Lightning Network, Litecoin can transfer payments much faster and cheaper than Bitcoin, which is partly why we raised out Litecoin price forecast for 2018.
This was something that no one expected. We all thought Bitcoin would be the first one with the Lightning Network, but Bitcoin has hit so many stumbling blocks. It hasn’t even activated “Segregated Witness” (SegWit, for short), a piece of code that would speed up transactions.
The trouble with a Bitcoin SegWit is that it needs most developers to get on board. If you’ve ever tried to get more than 10 people to agree on anything, you’ll understand what makes this so difficult.
Bitcoin has till August 1, 2017, to fully activate SegWit, or else the cryptocurrency will split. Even if the activation goes smoothly, however, there’s no guarantee that Bitcoin will scale all that well. It has core issues, and the founder is nowhere to be found.
Meanwhile Litecoin already integrated SegWit and got on the Lightning Network. Just to rub salt in the wound, the founding team also released a white paper outlining how the currency plans to scale. Talk about being prepared.
Is Litecoin a Good Investment?
Litecoin’s success over the last few months makes it a standout performer in the cryptocurrency market. Although it is currently facing the same lull as the rest of the industry, it will re-enter the next bullish cycle with a definitive roadmap for scaling. That is a big advantage.
We could start to see developers and investors switch from Bitcoin to Litecoin, thus creating a rotation of resources to drive LTC prices higher. Also, because you can now buy litecoin straight from exchanges like Coinbase, you no longer need to buy bitcoin first.
It used to be that investors changed U.S. dollars into bitcoin and then into litecoin.
Now that the transaction process is direct from fiat money to litecoin, the need for BTC tokens will be reduced.
There are a lot of asterisks in this argument, of course. But none of them are fatal. Litecoin still holds an immense amount of possibility, which is why our Litecoin price predictions for 2018 range from $300.00 to $400.00.
While this acceleration would not be enough to catch Bitcoin prices, it might put Litecoin on par with Ethereum.
Original Author: Gaurav S. Iyer