Litecoin, which is currently sitting comfortably in fifth place in the ranking for most valuable cryptocurrency on the market, has skyrocketed a staggering 8,088% in 2017 so far. A lot of this stunning gain happened within the past month – Litecoin was valued at about $90.00 a piece at the beginning of December. Now, the price of a single Litecoin is $357.49!
In the last thirty days, Litecoin has jumped a whopping 417%. In the last week alone, it’s grown 59%. These short-term sky-high gains are a rarity, but – lucky for Litecoin owners who bought in a couple months ago – this altcoin has been an incredibly profitable choice.
When it comes to the realm of altcoins, Litecoin has had a phenomenal growth story – blowing away a lot of its competition and even becoming a strong contender to the cryptocurrency from which it was forked (bitcoin).
But a lot of us still don’t know too much about Litecoin, and how it’s different from bitcoin or Ethereum – why is this altcoin increasing in value so quickly?
What is Litecoin anyway – and how is it different than Bitcoin?
Some people in the cryptocurrency space refer to Litecoin as the silver to bitcoin’s gold.
Litecoin was launched in 2011 as a sort of lightweight, or slimmed-down, version of bitcoin. The two cryptocurrencies are the same in the most important sense: they are both intended to be stores of value and a means of peer-to-peer transactions. And they work similarly on a basic blockchain level as well, but there is a very specific reason for that.
When Litecoin was born, it was “forked” from the Bitcoin Core client. That simply means that Litecoin was created as a clone of Bitcoin’s blockchain software, but then some minor adjustments were made to Litecoin – and now they are distinct and independent digital currencies. It’s called a fork because it can be imagined like one cryptocurrency traveling down a road, cloning itself and each version goes down its own path.
The person responsible for the creation of Litecoin is Charlie Lee, a fomer Google employee and Coinbase’s current Director of Engineering.
The changes made to Litecoin aren’t all that radical. At just 2.5 minutes, Litecoin has a smaller block generation period. Bitcoin takes about nine minutes.
There is also a higher amount of maximum coins in circulation compared to bitcoin. On top of that, bitcoin operates on a different hashing algorithm – called scrypt. Bitcoin uses SHA-256.
One of the main appeals of Litecoin is that it is actually super similar to bitcoin – and a lot of investors like that fact. People feel more secure putting money into something that feels familiar to what they already trust, compared to a more obscure altcoin.
A strategic advisor for a firm called 360 Blockchain, Jeff Koyen, told Forbes in a recent interview why people have been flocking to Litecoin: “But with Bitcoin overbought at the moment and Ethereum relatively flat, they’re turning to Litecoin — a grande dame crypto with reliable underpinnings and enough similarities to bitcoin that they’re comfortable buying.”
As investors grow bored with the go-to digital coins (bitcoin and Ethereum), they may very well continue to gravitate toward Litecoin. We are certainly keeping our eye out on this altcoin – especially after its explosive growth in December so far.