At BQT, we our curated list of asset pairs is and will perpetually remain a work in progress. That said, we’ve already listed BNB, Binance’s internal token on bqtx.com. If it were a true cryptocurrency, it would be the seventh-largest by market cap. That suggest we need to examine the top six: EOS, BCH, XRP, ETH, BTC and today’s installment, LTC.
As of this writing, the market cap for litecoin, or LTC, is $7.2 billion, according to CoinMarketCap. That’s around 2.9% of all digital assets’ combined. Another way of looking at that is LTC’s total value roughly equals second-place ETH’s daily trading volume. On the subject of daily trading volume, though, more than half the LTC supply in existence moved over the course of the 24 hours preceding this writing, making it perhaps the most liquid cryptocurrency on the market.
One byproduct of that liquidity is that it appears to be losing correlation with the benchmark BTC more drastically than many other digital assets. It moved up along with the rest of the pack during the first week of April but then, when BTC stabilized — relative term — against the dollar, LTC slid against both. From the beginning of May, LTC lost ground against BTC even as it gained in dollar terms. After three weeks of that, it quickened its page against the dollar and made back most of what it had lost against BTC in recent weeks.
LTC was one of the earliest non-BTC cryptocurrencies or, in the parlance of 2011, “alt-coins”. Aside from an even more hardware-intensive hashing algorithm, there’s not a lot of technical difference between the two, so the question becomes: Why does LTC even exist?
According to computer scientist Charlie Lee, who invented the thing, the sole intention was to make a fork of bitcoin that could be used for smaller transactions. It’s long been said that there might never come a time when you could walk into a neighborhood coffeeshop and pay for your latte in BTC, but that’s exactly why LTC what created.
(Side note: Nothing but love, but why would an Asian guy ever take the English name Charlie upon moving to the United States? Having been born in a communist country myself, I’d be hesitant to call attention to that connotation. I’m not arguing with Mr. Lee’s decision, just saying I’d have made a different one.)
There weren’t many crypto exchanges at the time, considering that there was really only one cryptocurrency, BTC. Bitstamp, the granddaddy of crypto exchanges, was formed the same year as LTC and was still being run out of Slovenia. So Lee launched LTC on the same platform that Satoshi Nakamoto launched BTC just two years prior: the Bitcointalk forum.
Lee spent the next two years working at his old day job, developing Chromebook operating system software at Google. (Funny how much crypto changes hands through Chromebooks. Funny how little of that changes hand via the preinstalled Chrome browser.) He then went to work for Coinbase in 2013, before that exchange started dealing in LTC. But shortly after they hired him, they did initiate LTC trading. And I know we all like to think of that California-based operation as the choirboy of crypto exchanges — centralized, fully licensed, scrupulous about KYC protocols, doing everything it can to appeal to U. S. regulators. But one of their employees invented one of its most heavily traded assets. Isn’t that a red flag to anyone?
Ugh. Don’t get me started on centralized exchanges. Anyhow...
In its more recent history, LTC garnered a couple of noteworthy distinctions. First, it became the first major cryptocurrency to implement a soft fork via Segregated Witness. Then the same month, May 2017, the Lightning Network proved out by transferring one one-hundred-millionth of a Litecoin from Zurich to San Francisco in less than a second.
The key advantage of LTC is its relatively compact block generation time, 2.5 minutes. That compares favorably to BTC’s 10 minutes, but ETH would win in a race at a time of 20 seconds. XRP, which I wrote about in a previous post in this series, would smoke them all at 3.5 seconds.
The shorter the block time, the faster transactions clear. That’s not just an advantage for crypto traders, it also helps merchants who’d rather get their approval in seconds than in minutes. So it makes sense to use LTC for small transactions as opposed to BTC, but why would you use I instead of those other two? Monero, for that matter, is much more private than any of these and is just a touch faster block time than LTC, so at first blush it’s hard to fathom why so many crypto enthusiasts favor LTC.
One of the advantages has to do with the consensus algorithm. I already mentioned that it’s more hardware-intensive than even BTC’s, which is notorious. And yet hashing via Scrypt is more accessible to the part-time miner than via BTC’s SHA-256. LTC enthusiasts can mine their own, sell it then mine more — a feature out-of-reach for most BTC hodlers.
So that’s another reason to exchange your BTC for LTC, but what about those other assets?
As for ETH, these were really developed with two very different uses in mind. ETH is intended to run smart contracts and develop dApps, like some great, big, decentralized supercomputer. LTC, more modestly, just wants to decrease the time, friction and expense of small transactions and value transfers.
This sounds a lot more like the Ripple white paper and yet, over time, there’s been a lot of mission creep governing XRP. While LTC remained a peer-to-peer asset, XRP became more entwined with legacy financial services companies and, as such, became more centralized itself. If you basically like XRP but don’t appreciate how the lab that created keeps its hand on the leash, then LTC might be the cryptocurrency for you.
As for an LTC advantage over XMR, I wish I had one. I went looking for one, couldn’t find it. Sorry. LTC has a higher market cap so is presumably more liquid but beyond that I got nothing.
I don’t feel bad about that because neither does Lee.
“Another project that I’m interested in is Monero: I think a bit of privacy and fungibility is something that’s missing from Bitcoin and Litecoin, and it’s very much needed,” he told Andreas Townsend at Oracle Times last year.
LTC seems to be sticking above the psychologically important — that is, anything to hang a headline on but otherwise arbitrary and useless — milestone of $100. It also didn’t stop at $110. Meantime, it has attracted renewed interest in the mining community.
“Litecoin’s hashrate has been growing recently,” according to FXStreet’s Tanya Abrosimova, “meaning that miners need to dedicate more computing power to keep the network working.”
This has to do in part with new, LTC-specific mining hardware reaching the market, but I’m inclined to believe it also has to do with the market for freshly minted coins. It recently passed BCH for the No 4 spot on the leader board, kicking a little dust in the faces of EOS and BNB.
This article is being written on a day when the crypto market, after broadly advancing over the course of several months, has taken a weeklong breather to take some profits. But not LTC. Over the past seven days, it was the only major cryptocurrency to actually advance against the dollar.
But that’s just one data point and is in itself neither bullish nor bearish. Apparently, there’s a lot of support for LTC in the crypto space but that support is far from universal. NewsBTC offers some compelling technical analysis suggesting that the coin’s value is likely to fall by half in the foreseeable future.
Is NewsBTC right? Or will LTC continue on its current upward trajectory?
I don’t know. That’s why I run an exchange. It doesn’t matter what I think as long as I can help you find a peer-to-peer counterparty. Then I guarantee that, between the two of you, 50% of you will be right.
A compelling case can be made either way, and that’s BQT’s raison d’etre. You make your case and the other crypto enthusiast makes theirs. As long as there’s a reason to trade and liquidity to allow you to trade back if you decide to change direction, then we at BQT hope you enjoy your experience on our platform.
Edward is an Ernst and Young Entrepreneur of the Year Finalist, Blockchain Enthusiast and visionary behind many successful organizations. An avid entrepreneur, Edward has a knack for designing distinctive business models complemented with superior technology to deliver unparalleled service and profitability. Edward also has been advising and consulting for various successful Blockchain technology and recently launched his own bqtx.com Social Crypto exchange helping traders connect with each other to leverage their crypto assets.
bqtx.com has been in development since March 2017 and its ICO launched September 18. The information can be found online at bqt.io, on Telegram @BQTCommunity and on Twitter as @bqt_ico.