The bitcoin is not alone. Most people are not aware that the success of the bitcoin has spawned a wave of copycat digital currencies. The vast majority of these copycat virtual currencies will sink little noticed into the sea of history, but a few, such as the litecoin, may actually emerge to compete with the bitcoin as the new currency for the 21st century.
Litecoin is less expensive to mine, more plentiful and more suitable for small transactions than bitcoin. The prices of both virtual currencies have dropped since a big run-up late last year, but litecoin’s price is still 490% higher than six months ago, compared with just 140% for bitcoin over the same time span. The total value of litecoins available for use is ranked second in total value behind bitcoin, according to CoinMarketCap, a website that tracks over 200 virtual currencies.
Litecoin just a couple of years behind bitcoin
A number of analysts and financial experts have commented that the litecoin is following a similar trajectory to the bitcoin. “Litecoin right now is where bitcoin was the same time last year,” Michael Curry, co-founder of Canadian digital-currency exchange Vault of Satoshi, explained in an interview. “As people are becoming more familiar with bitcoin, they are starting to see there are other coins out there.”
More litecoin available
One important consideration is that four times as many litecoins can be mined as bitcoins, making the new digital currency more attractive to both users and miners. Miners can invest less to get more coins, while consumers could view litecoins as more affordable.
“This will make litecoin appear more accessible, since its price will climb more slowly than bitcoin,” said Nicholas Colas, chief market strategist at ConvergEx Group, a Big Apple-based trading services firm.
Alternative to bitcoin
Both the litecoin and the bitcoin can be used to purchase services and products at many ecommerce venues, though bitcoin is still accepted more widely today. That said, a growing number of merchants are paying attention to litecoins. Patrick Byrne, CEO of Overstock.com, Inc. (NASDAQ:OSTK), recently allowed in an interview that the mega-online retailer is considering accepting litecoins.
President Robert Roque of Verbena Products LLC, a vendor of beauty products and cosmetology supplies, says litecoin represents over 20% of all alternative-currencies sales, while bitcoin accounts for the rest.
“In terms of a payment solution for us, it’s as good as bitcoin,” Roque said. “It just doesn’t have the popularity of bitcoin. But a lot of exchanges are beginning to accept litecoin, and that should create liquidity for the future.”