Sunday, November 27, 2022

Litecoin: Is it Strong Enough to Survive?

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Litecoin has a number of characteristics that made it one of the most promising bitcoin alternatives when it was first introduced. Indeed, people in the blockchain industry dubbed Litecoin “the silver to Bitcoin’s gold”.

Flaws in Litecoin’s technology that they discovered subsequently contributed to the cryptocurrency’s market capitalization falling in comparison to other cryptocurrencies. Existing roadblocks in the blockchain industry, including government regulation and a lack of consumer expenditure, aren’t helping matters.

In this piece, we’ll go through the main benefits of Litecoin that have helped it establish itself as a trustworthy Bitcoin alternative. Also the flaws that have most likely led to its recent market cap dip.

Then we’ll talk about whether these flaws will be too much for Litecoin to overcome the major challenges that cryptocurrencies are now experiencing.

Litecoin versus Bitcoin

Litecoin is only one of over 5,000 cryptocurrencies that have risen as Bitcoin alternatives. Only eight of these cryptocurrencies, however, account for about 90% of the total market capitalisation.

Bitcoin, Ethereum, Cardano, Binance Coin, Tether, Solana, Ripple, Dogecoin, Polkadot, and USD Coin are the top 10 cryptocurrencies as of now.

Litecoin, which has been around since late 2011, has established itself as one of the most reliable Bitcoin alternatives. It also has consistently been in the top 10 for several years. Charlie Lee, Litecoin’s inventor, advertised it as a superior alternative to bitcoin. A coin that offered quicker transaction speeds from the start. For example, a Litecoin transaction takes 2.5 seconds on average, compared to 9 seconds for Bitcoin.

Litecoin transactions are not only speedier, but they are also less expensive. The average transaction price for Litecoin is around $0.026, compared to $4.38 for Bitcoin.

P2P Network

Another key benefit of Litecoin is that it is based on an open-source peer-to-peer network. As a result, Litecoin’s platform has a lot of flexibility in terms of adding new features and innovations in response to the crypto market’s requirements. The Lightning Network and SegWit protocols, for example, have both sped up and streamlined transaction times.

The fact that Litecoin’s platform is open source, for example, implies that anybody may look at and modify the protocol. And because it’s peer-to-peer, it’s naturally decentralized, eliminating the need for third parties and their associated costs to execute transactions.

Litecoin’s Downsides

It should be clear why Litecoin has long been regarded as a secure investment option to Bitcoin for the reasons stated above.

Investor worries and alleged technical vulnerabilities with the Litecoin platform. On the other hand, have largely led to Litecoin’s decline from sixth place in overall market capitalization to fifteenth place at the time of writing.

Many observers believe that this is due to Litecoin’s failure to deliver on many of its primary promises over time. Litecoin’s key benefits of being quicker and cheaper in terms of processing transactions have slipped behind numerous other altcoins. Other altcoins with even faster transactions, such as Ripple and Solana.

The transaction security of Litecoin has also been put into doubt. For example, because Litecoin contains a fraction of Bitcoin’s total hashrate, it is more vulnerable to 51% threats. The fact that roughly a third of all Dark Web businesses accept transactions in the cryptocurrency further harmed Litecoin’s brand and image. This is the second most of any cryptocurrency.

Investing in Cryptocurrency

The biggest blow came when creator Lee declared in 2017 that he was selling all of his assets. This is due to a perceived conflict of interest that his promotional social media postings were boosting the price of Litecoin. Many investors lost trust in Litecoin’s leadership as a result of this occurrence, and some even doubted the coin’s viability.

There’s no denying that most Americans now understand the importance of investing in cryptocurrency.

According to a recent poll, 72.5 percent of respondents said they had at least one type of cryptocurrency. This is in comparison to fewer than 64% who said they had equities. Is Litecoin, in particular, still a viable option for regular crypto investors?

The answer to this issue will most likely hinge on Litecoin’s ability to overcome. Overcome the significant obstacles that it and blockchain technology as a whole are currently experiencing.

Is Litecoin Negatively Affected?

Governments have been increasingly assertive in their attempts to regulate cryptocurrencies, which has a negative impact on the amount of money invested in the market.

Attempts to limit profit by imposing taxes on individual crypto transactions, for example, naturally drive ordinary people to be more cautious about investing.

Another stumbling factor for blockchain is a decrease in Americans’ disposable income. For example, the great crypto run of 2017 coincided with a massive stock market boom and a Federal tax reduction. This leaves many Americans feeling (and in some cases really being) wealthier, with more cash on hand for high-risk, high-reward investments.

That age has come to an end, at least for the time being. As stimulus payments come to an end, it’s natural to expect cryptos to decline in value, as they did during the summer. This implies that they are depositing less discretionary money into Americans’ bank accounts.

Bitcoin as an alternative payment

Not to mention the fact that bitcoin has yet to gain widespread acceptance as a payment alternative on the same scale as fiat currencies. Yes, we’ve all seen Bitcoin ATMs come up. In addition, some countries that had previously prohibited cryptocurrency have now legalized it, with all of them showing indications of increased adoption.

However, only currencies with actual use as payment solutions for everyday transactions will survive in the end. Rather than fading into obscurity like previous Bitcoin competitors. Litecoin has merits. However, the worries raised by investors, as well as the present challenges in the crypto market, may make it a less enticing investment than other coins — at least for the time being.

When investing or trading, keep in mind that one of the most essential rules to follow. This is to never put all of your money into one item. To put it another way, no one currency should be your only investment. But it is up to you to determine whether the benefits of Litecoin exceed the drawbacks. And, to make it a part of your portfolio.

Summary

In the end, it’s too early to know if Litecoin’s obstacles are too great for it to overcome.

What is evident is that investing in Litecoin, and other cryptocurrencies, carries greater risk than it did previously. This may be reflected in the fact that Litecoin lost about half of its value during the summer. However one might argue that this was simply due to the large decline in the values of other currencies.

Should you keep Litecoin as one of your long-term investments? Assess whether you think Litecoin is on the right track to being a viable payment option.

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Ivan Cruz
Ivan Cruzhttps://www.cryptoconstellation.com/
Ivan Cruz is a writer for Cryptoconstellation. He has his Masters in Applied Research in Economics & Business. Ivan has been trading crypto for the past 7 years himself and feels it is his duty to bring you all the latest news.
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