Silver to Bitcoin & # 39; s Gold Massively Undervalued?

A new report by e-Toro author and analyst Mati Greenspan states that Litecoin is largely undervalued compared to other altcoins. The report is the latest in a series of publications explaining how various altcoins perform in the cryptocurrency space.

Success can come with risks

Describing Litecoin, Greenspan recognizes that it is no less risky than bitcoin or any other digital resource available today. However, it states that it brings specific benefits and higher appreciation ratios from customers than several leading altcoins, but that simply does not receive the attention it deserves:

"Litecoin has more adoption in terms of address transactions. total and volume trading compared to other cryptocurrencies, however the total value of the network is lagging behind the comparison Litecoin has a much higher number of daily active addresses (DAU) than its market capitalization compared to all other currencies considered except Dash: The volume of daily transactions relating to Litecoin is even greater than that of any other currency analyzed, suggesting that it is, in fact, a very active and consolidated currency that may not be reflected in its current valuation. "

Greenspan concludes by explaining:

"Litecoin (LTC) is by far one of the most established networks in the cryptographic space rafico. It is already used by many as a deposit of value and means of exchange, and therefore can be considered as money. Furthermore, the revolutionary partnerships that have been formed by the Litecoin Foundation place this crypt for long-term success. "

A once prominent coin is passed off separately

For a long time, Litecoin held the fifth largest cryptocurrency by market capitalization, although it has since been sidelined by EOS. Litecoin is now in sixth place and remains among the top ten cryptocurrencies in circulation.It was developed in 2011 through a bitcoin fork by the former Google employee Charlie Lee, making it older than the main competitor of bitcoin Ethereum.From there, Lee was able to create its own block of genesis and start a new digital currency without previous transactions.

The report further explains:

"Another interesting aspect is that Litecoin has undergone a very significant correction from the historical highs of the cryptocurrency industry in January 2018. Compared to its historic high of $ 378, Litecoin has fallen by 81 percent to its current price. This is a slightly greater decline compared to the 71% decline in the total market capitalization of all cryptographic assets. Given that Litecoin has a stable and well-functioning product as well as a significant adoption, this bearish market in the entire cryptocurrency sector may have led to the loss of Litecoin. "

How is it combined with Crypto's father?

Litecoin is often referred to as" digital silver "along with bitcoin digital gold, although this is partly due to the age of the currency (the bitcoin it is only slightly older), Greenspan ensures that it eventually remains one of the most important entities in the market, as a primary alternative to bitcoin as it offers cheaper and faster transactions.

Chart of Litecoin prices from the beginning of 2018

It is also one of the most liquid and easiest coins to exchange at fiat compared to other altcoins, and offers a little more diversification than other forms of digital money as it is considerably cheaper than the bitcoin, giving it more room for growth.

Finally, it is appropriate that Litecoin can pick up comparisons with silver, while bitcoin is placed against gold. 39; on gold costs about 80 ounces of silver, while at the time of printing, a bitcoin is worth approximately 85 LTC. The amount of Litecoin that winds through the cryptocurrency arena is about 3.35 times larger than that of the bitcoin, and the final total will be four times larger. Litecoin is extracted much faster than bitcoin, which means that the price of Litecoin should rise faster than the price of bitcoin, according to the report.

Bitcoin vs. Litecoin

When you think about cryptocurrency, you think of Bitcoin. It is comprensible. Bitcoin has been the public face of all cryptocurrencies since it first appeared on the scene in the obscure white paper of Satoshi Nakamoto in 2008. The subsequent adoption by the black market of the Silk Road and the exponential increase in price, which turned pizza into millions of dollars, forever cemented it as a currency to watch.

Bitcoin, however, is a product of its time. Very little technology has survived since 2008 unchanged, from cell phones to laptops to solar panels. Bitcoin is no exception. Although its introduction was revolutionary, its underlying code has slightly worsened. Bitcoin has never really been designed to handle the type of traffic that the network currently requires, and so the speed and scalability problems have plagued the Bitcoin community shortly after its rise to the fore. This has resulted in at least 30 legitimate forks of the open source code of the currency, almost all aimed at improving the average speed of Bitcoin transactions.

A notable fork that did not adopt the profitable name of Bitcoin was Litecoin. Since its creation in 2011, Litecoin has become one of the main couplings of alternative currency bases on most major exchanges, and often fills the transaction speed gaps that would otherwise make Bitcoin fail. We will take a brief tour of the history between these two cryptocurrency giants, examine the state of the market and try to understand what the future holds for both currencies.

The Birth of Litecoin

The creation of Litecoin stems from a dispute between the developer of Bitcoin Charlie Lee and the main Bitcoin community. Between February and June 2011, the price of Bitcoin rose from $ 1 to $ 31, a huge increase. While this was seen by most members of the Bitcoin community as a net positive, Lee claimed that Bitcoin was already facing scalability issues and the price was increasing disproportionately with respect to the network's ability to manage peer-to-peer traffic. peer. To solve this problem, he created a hard fork of the Bitcoin code to form a new, faster and cheaper currency called Litecoin. Litecoin's supply was set at 84 million, almost four times the 21 million Bitcoins, to contain prices per currency. The transaction time was reduced to about a quarter of Bitcoin and its reward for the block doubled.

Read our Beginner's Guide to Litecoin

In addition, Litecoin mining is significantly cheaper than Bitcoin mining in terms of electric cost. The downside is that the scrypt used to extract Litecoin is a smaller version of the Bitcoin script, and therefore could be inherently less secure. After all, security is one of the main reasons to use cryptocurrency in the first place, support for Bitcoin supporters and compromising security to make Litecoin's spending easier is a potential recipe for disaster.

Technical differences

Table provided by Coindesk

Market overview

As of August 2018, the cryptocurrency market as a whole still suffers from the effects of the so-called Long January, a month hangover resulting from the surprise of December 2017 run-up to the highest prices ever. In the period of December-January, Bitcoin crested $ 20,000 per currency, while Litecoin peaked at $ 366.

At the beginning of July, Bitcoin had reached a price per coin of about $ 6,600, while Litecoin was sunk only $ 82. Bitcoin's market capitalization stood at $ 113 billion, while Litecoin's market capitalization was about $ 4.7 billion

The disparity between the fundamentals of the two-coin market could not be more clear. However, both BTC and LTC – together with ETH – are cornerstones of the exchange base pairing market.

This is not immediately apparent from the 24-hour volume of coins. The 24-hour volume of Bitcoin in July 2018 was about $ 5.2 billion, making Litecoin's $ 264 million pale. In fact, more Bitcoins in terms of US dollars are transferred every day than Litecoin's market capitalization. Litecoin also tackles the tough competition of non-Bitcoin forks. The positions number 2 and 3 on CoinMarketCap from July 2018 are occupied respectively by the platform currency Ethereum and by the lubricant in foreign currency Ripple. Both have a market capitalization several times that of Litecoin, which settles in the position of global market capitalization number 6.

The relative light weight of Litecoin in terms of market size belies its importance for the market as a whole . With transaction speeds much faster, Litecoin has become a staple among day traders and other people who need to quickly convert cryptocurrencies to take advantage of sudden buying opportunities. In the time it takes to process a Bitcoin transaction, a trader on a given day may see his earnings evaporate while the more agile Litecoin users convert and finalize their trades. Litecoin, therefore, has become less competitive than Bitcoin in pure currency and in the value-storage arena and becomes an effective means of pushing alternative currencies from one place to another without the hassle associated with the first conversion into Bitcoin.

The Future of Litecoin

At the moment all alternative currencies, including Litecoin, depend strongly on the price of Bitcoin. The market simply did not get widespread adoption, and no currency even came to challenge Bitcoin's financial position at the top of the list.

This could change a lot as the market grows and fits, and Litecoin seems to have carved a niche for itself as a recognizable and widely used means of exchange for alternative currencies. There are some other projects with this stated goal, but none can boast Litecoin's pedigree or market capitalization. Moreover, Bitcoin and Litecoin share heavy coding elements and therefore projects explicitly designed for one currency or the other are often interoperable.

Litecoin also has a surprising number of dark horse elements in his favor. One is the growing acceptance of Litecoin on the so-called dark network. This is the same vehicle that pushed Bitcoin into the limelight through the aforementioned Silk Road. Litecoin traffic accounts for around 30 percent of obscure web transactions, second only to Bitcoin. Although this may seem a rather unpleasant path to success, the dark web adoption is the same portal used by Bitcoin to achieve mainstream acceptance. If nothing else, it works like a proof of concept; while Litecoin certainly has some security and anonymity vulnerabilities, ensuring that it can not remain in the dark forever, its use as a currency is proven and true. In other words, if it works on the obscure web for the purchase of various illegal or unethical materials, it should work well in legitimate markets.

Litecoin is also popular in China, and many market observers believe that the Chinese and Asian markets in general will drive the next big wave of cryptocurrency adoption. The Chinese and Korean governments have both relaxed their position towards cryptocurrencies in general, opening the door to potential billions of new investors. Litecoin boasts a more affordable price – for the time being anyway – compared to Bitcoin, making it more attractive to new investors who want to own a whole coin.

The only big negative in the Litecoin arena is, ironically, its resemblance to Bitcoin. As a cheaper and faster Bitcoin, Litecoin presents investors with important advantages over the current king of cryptography. The new generation of altcoin, however, is built specifically to replace Bitcoin in a variety of arenas, from pure currency to the Internet of Things, to artificial intelligence up to digital platforms. Litecoin could very well supplant Bitcoin in some areas, but it will be hard to work as a catchall solution for hordes of alternative currencies trying to take its place. For practically every case of Litecoin use, there is an altcoin that does it better, faster or cheaper.

Only time will tell if the Litecoin nameplate will exceed these challenges. After all, perfection is often the enemy of good, and Litecoin could be good enough to maintain a point of support in the cryptic world for years to come.