Litecoin (LTC) is currently trying to distinguish itself from Bitcoin (BTC) and all the other cryptocurrencies. It does this through its strong user base and attributes found in successful digital currencies.
Litecoin, founded by Charlie Lee in 2011, has been active in the cryptocurrency space for 10 years. Since then, Litecoin has built a reputation as being a stable place to store value, making it an easy option for newcomers looking to enter the market.
Litecoin has been one of the most widely use blockchain protocols and its native token. LTC is now a top 25 cryptocurrency – meaning there are huge investment opportunities.
For its tenth birthday, Trading Education is looking at the Best reasons why Litecoin has intrinsic value
-Scarcity
At the moment, 68.7 million LTC are in circulation. Which means 83% of all max-out coins have been mine. This leaves just 17% for future miners to compete for. Unlike Ethereum’s Vitalik Buterin and Dogecoin’s Jackson Palmer, Charlie Lee will not be increasing the number of Litecoin’s tokens in the future.
As a trader or investor, you should know that when assets become scarce, they become extremely valuable. Precious metals such as gold are considered an asset with intrinsic value and the demand for gold skyrocketed. When the global economy collapsed in 2008. Millions of people buy gold because they understand how essential it is to have an emergency fund.
Surprisingly, several investors have placed small-time and large-time investments in Litecoin. Examples of small-time deposits can be attributed to traders on cryptocurrency exchanges like Binance. When they purchase $1-500 worth of Litecoin. This is not different from platforms like Skrill and PayPal.
A deposit of this size is enough to cover a purchase in the six-figure range. A good example is Grayscale’s Litecoin Trust. Which was created on March 1st, 2018, and has assets worth $284 million.
So, can Litecoin be a store of value? It’s often categorized as such in advanced financial management studies. Money is locked into LTC with the anticipation that its worth will go up over time. I believe the price of the digital token will increase in value in the near future.
If one or more of the factors that currently support the price of LTC such as supply or demand were to change, the prices of digital assets like Bitcoin will have a difficult time recovering from this degree.
-Utility
Litecoin was the first altcoin after Bitcoin, which means it had the same first-to-market advantages as Bitcoin. For example, like Bitcoin’s founder, Satoshi Nakamoto, Litecoin founder, Charlie Lee, focused on solving scalability issues. Many people complained about the sluggishness of the Bitcoin protocol. Which has led to relatively high transaction fees.
As a result, the SHA-256 proof-of-work (POW) algorithm. Which had been advocated by hardcore Bitcoin users because of the security. It brings the Bitcoin blockchain protocol to be replaced. With a consensus algorithm called SCRIPT.
A benefit of SCRYPT is that miners do not need to use application-specific integrated circuits (ASICs) devices to confirm transactions, and instead can use any type of GPU or CPU.
Litecoin’s (LTC) operations as a utility token have gone up a lot over the past decade. The average block time was 2 minutes and 35 seconds, as of writing this sentence.
Programs that are designed to handle currency fall under the exchange medium. There are millions of people who have invested in Litecoin. This cryptocurrency is often used for everyday transactions. The above number accounts for the thousands of LTCs used (1,639,151) in the last 24 hours up to the time of writing. Which is part of what can be currently found in circulation.
-Divisibility
Like all cryptocurrencies, you don’t need to buy a whole Litecoin. It can be divided into 8 decimal points. When writing, a Litecoin was worth 134 USD for 1 coin.
If you don’t have the cash to spend on cryptocurrencies, you can invest in a partial coin. For example, buying $1 worth of Ethereum will give you 0,066671437 in your portfolio.
For the sake of this example, let’s talk about the price of gold
You can buy gold per ounce at $1,809.66, gold per gram at $58.18, and gold per kilo at $58,181.92.
No matter your situation, you can invest a little and receive substantial profit in the long term – this means that even if you don’t have money to buy an ounce of gold, you could start with a gram or an ounce and still have huge returns in the past.
You can purchase half of a Litecoin today, and another tomorrow. This will result in the full value of a whole Litecoin.
More than simply being a digital currency. LTC (litecoin) can be divided into smaller units. This allows it to be more practical for people who buy small & large items.
-Counterfeitability
Unlike fiat modes of money (USD, EUR, or GBP) that continue to be printed and circulated periodically. Litecoin has a fixed supply that cannot be changed. There is also no one individual who can create new LTCs to be added to the maximum supply.
Let’s keep this really simple. Litecoin’s unlike other digital currencies in that they have features, unlike any other cryptocurrency.
One way someone might try to copy a cryptocurrency is by double-spending. This can be accomplished by sending the same currency to two different people at the same time.
Double Spending is when the same unit of currency like ETH, for example, is spent more than once. It creates a discrepancy between the amount of currency available and what was spent. In what is normally referred to as a “race attack,” “51% attack,” or a “Finney attack,” the person trying to hack the system and cause disparities must gain substantial control of computational power.
If LTC was mined by individuals, this would be very difficult to do since. There are many people online confirming transactions. In order to have control over the whole LTC blockchain, one person would need millions of computers.
Lightning has remained unaffected by hackers during its 10 years in the industry thanks to its strong original security protocol.
Crypto Cash Flow is a term that refers to the amount of money that an individual or organization is able to generate from their cryptocurrency investments or activities.
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-Transportability
One of the primary reasons the world moved away from barter trade and towards fiat currencies was because it was difficult to carry goods around in bulk. However, this isn’t as much of an issue with modern technology which helped pave the way for our current money system. Because of the ease at which money can be transferred internally or across borders.
LTC is similar to LTF. For merchants, it can be listed on millions of websites for low fees and can be quickly transferred from one wallet to another, making it a great new payment method. As the digital token continues to serve in thousands of transactions a day that amount to millions of dollars, developers continue to work on the network.
Other Important Reasons for Litecoin’s Intrinsic Value
Litecoin, like other cryptocurrencies, derives its value from a variety of factors, including its utility, scarcity, and network effects.
Bitcoin correlation
Research has shown that all cryptocurrencies are affected by Bitcoin’s price. Litecoin has a history of being influenced by the price of Bitcoin during both crypto bubbles and bearish periods. Experts believe a bullish cycle can ensue if crypto adoption and positive market sentiment continue to grow.
Once BTC gets to the point where it heads toward $100,000, there’s a high probability that LTC will start moving up in price too. At the moment, LTC seems to be largely independent so it might not follow BTC. The price of LOTIS may rise or fall depending on how the company performs and develops products in the future. It’s not just a matter of speculation for Litecoin’s tokens.
Open to Upgrades
In today’s world, many people rely on smart contracts. As a result, Litecoin’s value can be boosted by the future possibilities of its blockchain through DLT apps. The LTC platform will be extended for BTCs in November. As a result, a Defi token is used as a transactional coin and it will only improve the entire project’s popularity.
You now know the six reasons why Litecoin has intrinsic value. Investing in Litecoin means you’re convinced of its potential and agree with the principles it targets to impact. To avoid losses or to see investments grow. Investing in crypto-currencies does come with risks, so make sure you’re investing an amount you’re willing to lose.
