Once a promising cryptocurrency, Litecoin has been lagging behind newer peers in terms of market cap. Both Ethereum and Ripple have more cap size than Litecoin, and its valuation has been moving in a similar way than that of bitcoin for a long time now. There are no new breakthroughs for Litecoin in the horizon. It seems that this cryptocurrency will stay in the shadow of bitcoin, unless Litecoin-based economic activity picks up.
Cryptocurrency Boosters
There is no doubt that bitcoin had a huge advantage over every other cryptocurrency as a first mover. This allowed it to be adopted more widely, making waves in all kinds of media and almost becoming a household name. Other cryptocurrencies that came after, had huge shoes to fill. However, some cryptocurrency developers figured out that the best way to boost the relevance of their cryptocurrency, was by either filling some gaps that bitcoin as a first mover left wide open, or have their currency ‘do’ things that bitcoin couldn’t.
Innovative Cryptocurrencies
Ripple came into the market as a transaction protocol with a currency – ripples or XRP. Ethereum came into the market as a blockchain platform that would enable smart contract functionality, or as Gavin Wood described it, a “next generation bitcoin” Its cryptocurrency is the Ether – ETH. Both these concepts had a cryptocurrency component to it, but came into the market to either fulfil a purpose that bitcoin was not created for, or to take the ideas that the distributive-decentralized ledger uncovered, further. Litecoin does neither. Instead it is basically an iteration of bitcoin that has a different currency supply scheme, and a different encryption method.
Litecoin Valuation Patterns are not Surprising
Since Litecoin is so similar to bitcoin, the fact that it is losing some traction to more innovative cryptocurrencies is not a surprise. It is also not surprising to see how Litecoin value changes almost in lock-step with the value of bitcoin. In fact, the overall trend might be as close to that of bitcoin, that it is difficult to see a day in which bitcoin moves in one direction and Litecoin doesn’t follow.
Developing an Identity and Breaking Through
Litecoin could well be poised to replace bitcoin as a medium of exchange should the Bitcoin network run into trouble, or when bitcoin supply dwindles. However, this poses a set of challenges of its own for the cryptocurrency, since it might not be relevant to even use that kind of cryptocurrency if or when that happens. Instead, its relevance could be immediately boosted by a campaign that will get significantly more people to use it both to consume as well as to sell goods and services. This is exactly what increased bitcoin’s popularity.
Final Thoughts
This could take time, or it could never happen at all. After all, why would people use a bitcoin-like currency when they can already use the more established cryptocurrency? There might still be a few distinct opportunities for Litecoin, especially if transactions over its network are indeed faster than over the Bitcoin network. A Mike Hearn scenario could accelerate a possible migration into Litecoin, raising it above the cryptocurrencies that have overtaken it in cap size. Time will tell if these factors will help Litecoin breakthrough.
