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Bitcoin's Next Big Rival Bitcoin's Next Big Rival

Cryptocurrencies

Litecoin: Bitcoin’s Next Big Rival?

 5 min read / 

Many investors getting involved in the cryptocurrency market right now are chasing short-term momentum. People hear stories of how $500 worth of Bitcoin bought some five years ago is now worth $250,000. Hence, many people that missed the initial Bitcoin rush are now looking for the next potential blockbuster cryptocurrency that will turn them into overnight millionaires. There is now an explosion of alt coins in the cryptocurrency industry and almost everyone with an idea of how blockchain works is planning an ICO for a new type of cyber currency.

However, chasing the next big thing in cryptocurrencies is mostly an endless journey that may yield the occasional winner, but lots of losers. If ones wants to avoid the emotional rollercoaster ride that short-term cryptocurrency traders experience, one should seriously consider conducting due diligence to uncover sound cryptocurrencies that can be bought and held as a long-term investment.

Bitcoin VS Litecoin

Litecoin is to Bitcoin what silver is to gold. Both silver and gold are precious metals, but silver is almost always in the shadow of gold – except for the fact that silver’s relative cheapness gives it a higher form of liquidity over gold. When comparing stocks, investors have the benefit of using time-tested parameters such as EPS, EBITDA, and Revenue among others. However, in comparing cryptocurrencies, one might need to rely on similarities and differences and look at how such differences can translate into a differentiating factor for success.

In terms of differentiation, Litecoin payments are processed and confirmed at a significantly faster pace than Bitcoin transactions. Block generation time in the Bitcoin blockchain is 10 minutes whereas the generation takes 2.5 minutes on the Litecoin blockchain.

Another point of differentiation is that Litecoin is more adaptive to progressive change than Bitcoin. For instance, Litecoin initiated SegWIt to improve blocksize and increase transaction speed much before the Bitcoin community started talking about the need to upgrade blocksize. In addition, the fact that Litecoin is built on Bitcoin’s code makes it easy for the cryptocurrency to piggyback on developments and improvements in the Bitcoin network

 

Litecoin: Missing the Last Cryptocurrency Boom

The main reason Litecoin missed the cryptocurrency boom that turned Bitcoin into a household name on Wall Street is that its founders made the mistake of not being aggressive in selling the Litecoin brand. Litecoin invariably came to be known as a Bitcoin wannabe, (a Bitcoin clone at best) and investors simply had no reason to bet on Litecoin when Bitcoin was already hogging the limelight.

More so, Bitcoin has delivered impressive results on Wall Street; thus, Litecoin had an uphill task to attract market interest.

Granted, Bitcoin and Litecoin are built on similar technology, and they both seek to displace fiat currencies; however, Litecoin has some strong fundamental differences that are enough to make it stand and hold its own place (albeit on a slightly lower pedestal than Bitcoin). Below are three reasons investors should start considering increasing their Litecoin investments.

Undervalued

The first reason one should start considering investing in Litecoin is that it is massively undervalued relative to Bitcoin, and in this undervaluation lies massive opportunity. Bitcoin was created with a cap of 21 million coins to be mined, while Litecoin has a cap of 84 million. Hence, the supply of Litecoin is four times greater than the supply of Bitcoin and Bitcoin should, theoretically, always be worth four times more than Litecoin.

Both Bitcoin and Litecoin are built on similar codes and blockchain technology, and both cryptocurrencies are deflationary. In essence, the cap on the volumes of Bitcoin and Litecoin that can be mined suggests that the market value of the currencies will continue to rise as their market demand soars.

However, Bitcoin is currently trading up around $4,595.40 per BTC. Litecoin is nowhere near a quarter of that price as it trades up around $77.97 per LTC. Hence, the current state of the market that makes Litecoin trade at a fraction of Bitcoin’s price is simply illogical.

It may be somewhat too early to judge whether Bitcoin is overvalued or not, since there are qualifying benchmarks for its performance.

Potential to Outperform Bitcoin?

The second reason one could seriously consider investing in Litecoin is that it is starting to build up momentum for a market boom. Many investors are impressed with the fact that Bitcoin is up more than 400% to $4,595 trading price in the year-to-date period. The uptrend in Bitcoin is particularly interesting when one considers the fact that Bitcoin soared from a $1,018 price on January 2nd, to its current trading price above $4,500.

However, while the financial media is fixated on Bitcoin, a fact easily overlooked is that Litecoin has posted exponentially larger gains than Bitcoin this year. From a trading price of $4.42 on January 2nd, Litecoin has soared more than 1,664% to its current trading price of $77.97. Hence, while the price of Litecoin seems to be meagre compared to the price of Bitcoin, Litecoin has shown an impressive ability to outperform Bitcoin in terms of price gains.

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Cryptocurrencies

Crypto Carnage: Blood on the Dance Floor

 3 min read / 

crypto crash

It is said that ‘Blue Monday’, typically the third Monday of January, is the most depressing day of the year. This has, undoubtedly, been the case for cryptocurrency owners worldwide; from Monday onwards, almost all of the world’s major cryptocurrencies have seen a drastic slump in their prices.

Having reached the $14,000 mark last week, Monday onwards marked a severe fall in Bitcoin’s value. On Wednesday, the dubbed ‘king of cryptocurrencies’ dropped to below $10,000 for the first time since the end of November, before making a small recovery on Thursday. It stands at $11,500 at the time of writing, but the day is still young.

And Bitcoin has only been leading the way. At this point last week, the price of Ethereum, the second most valuable cryptocurrency, was approximately $1,200; a slump on Monday saw it fall to a low of $800 on Wednesday before pushing through the $1,000 threshold again, and reaching $1,030 a day later.

Ripple’s XRP also followed suit; the cryptocurrency has almost halved in value over the past week – from around the $2 mark to a low of $1.20 on Tuesday. Since then, it has marginally recovered in price, to $1.48 at the time of writing.

Monero, IOTA and Cardano were also impacted – since Monday, they have declined in price by 35%, 22% and 21%, respectively. Litecoin now sits at $195, down from $240 at the beginning of the week.

The crash occurred at a time of optimism and hope for cryptocurrency owners. Just earlier this week, US money transfer company MoneyGram announced a partnership with Ripple in the aim of streamlining money transfers. Yesterday also marked the expiration of the first Bitcoin futures contract that had been listed by the CBOE.

Still, China’s offensive rhetoric against Bitcoin and other cryptocurrencies in the last seven days is likely to have stoked fears amongst investors, causing a major sell-off. The country confirmed earlier this week that it was seeking to further clamp down on its restrictions against virtual currencies by eliminating cryptocurrency trading.

It has also recently announced plans to further restrict Bitcoin mining within the country. Recent statements coming from Chinese governmental circles could go as far as to suggest that China wants to eliminate cryptocurrencies outright: the People’s Bank of China (PBoC) vice governor, Pan Gongsheng, purportedly encouraged the state to introduce a total ban on cryptocurrencies.

China is by no means the only country to have espoused hostility toward cryptocurrencies. Russia also partially echoed China’s scepticism – President Vladimir Putin noted this week that “in broad terms, legislative regulation will be definitely required in future”.

South Korea’s unreceptive stance toward digital coins – it was reported earlier this week that its finance minister, Kim Dong-yeon, had stated that the government would be introducing measures to clamp down on the “irrational” cryptocurrency investment rage – may have also played a part in driving prices down.

Still, for every bear, there seems to be a bull. Time shall tell whether increasing restrictions on cryptocurrencies from different governments will further impinge on their price, or if they will find a way to adapt to the new obstacles and prove all those championing them (and making millions in the process) right.

Keep reading |  3 min read

Cryptocurrencies

UK Banks Shun Bitcoin

UK banks Bitcoin

No UK banks have partnered with cryptocurrency exchanges.

Editor’s Remarks: The lack of any relationships between UK banks and cryptocurrency exchanges means that UK investors currently have to move their money through a series of foreign exchange transactions and services before they can cash out their profits. As a result, they incur high fees and often the suspicion of their banks. This is contrary to many European banks, which have partnered with such exchanges. To an extent, this is because the UK retail banking sector is highly concentrated, whereas in Europe and the US the consumer has more options. The UK government is also due to release guidance on how cryptocurrency gains are to be taxed in the next few days.

Read more on Bitcoin:

Keep reading |  1 min read

Asia

Hacks on Cryptocurrency Exchanges Linked to North Korea

 1 min read / 

hacks

A report has linked a hacker group, responsible for targeting crypto-investors and exchanges, to the North Korean state.

The attacks took place against South-Korean crypto-exchanges and included attempts to harvest users’ passwords. The report does not say if the attacks were successful.

The report, by internet technology company, Recorded Future, has identified the attackers as the group Lazarus, known to be associated with the hermit kingdom. The malware was similar to that used against Sony Pictures in 2015, the WannaCry ransomware attack in 2017 as well as the Bangladeshi bank heist in 2016.

Attacks began when cryptocurrencies started to rapidly increase in value. It is believed North Korea favours attacks on cryptocurrency because they are not linked to any bank or government, making attempted heists less politically incendiary.

North Korea has shown a great interest in crypto-currency, potentially as a means for funding itself. In 2017, the elite Pyongyang university started to run courses on the virtual tender.

Keep reading |  1 min read

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