While most cryptocurrency buzz is always geared towards Bitcoin and Ethereum, other tokens can also offer something different for some users. Litecoin is one of these coins. Often eclipsed by newcomers that offer interesting capacities like native smart contracts and embedded stablecoins, Litecoin is still alive in today’s convoluted market.
And not only alive but enjoying a great year price-wise. According to data taken from CoinGecko, a popular cryptocurrency price aggregator, Litecoin has grown 400% in the last year, outperforming some of its newer (and shiner) competitors. But what are the traits that make Litecoin a desirable investment right now?
Litecoin Is Simple
Litecoin is as barebones and simple as it gets. This might seem a contradiction in today’s market where most currencies focus on doing multiple things at the same time. However, this simplicity can appeal to novice investors just trying to dip their feet in an easy-to-understand cryptocurrency, instead of wanting to grasp the whole ecosystem at once.
Availability is also a key factor for the success that Litecoin is having right now. Being one of the oldest cryptocurrencies, created in 2011 by Charlie Lee, Litecoin has been battle-tested several times and has nothing to show to the world. Its system has more than 10 years of functioning without issues, and this resilience makes it available in all popular exchanges that trust the blockchain. As an example of this, Litecoin was one of the five selected currencies to be listed in Paypal when the company announced its pivot to cryptocurrency payments last year. This alone helps to put it at the hands of new investors in the ecosystem.
Litecoin is also cheaper than Bitcoin, and investors must put less money to purchase a unit of LItecoin, which is currently at $220.15.
While Litecoin has been always under the shadow of its Bitcoin sibling, and it is considered a derivative product (Litecoin is, in fact, a fork of Bitcoin), some design traits make Litecoin more useful in certain applications, like payments. While the Bitcoin blockchain targets a block time of ten minutes for its applications, Litecoin is designed to target a block time of 2.5 minutes. This means that, when settling payments, the Litecoin network will be faster to reach a confirmation for the operation. This gives an edge to Litecoin when it comes to commerce-related applications.
Also, due to the less used block space, it is almost sure that a transaction made using Litecoin will be cheaper than an equivalent transaction made using Bitcoin. Bitcoin transaction fees have been one of the worst problems the cryptocurrency has faced in its journey to capture a part of the payments market. Litecoin fees are almost non-existent, and users can take advantage of them when Bitcoin fees are too high. This is why Litecoin is sometimes known as “silver to Bitcoin’s gold,” because it acts as a comparable chain with less perceived value, akin to the perception of silver compared to gold.