Bitcoin is facing a competition from one of the digital currencies – Litecoin, according to many merchants and investors. Litecoin has a number of important features for digital currency. Developers say that it is cheaper to generate, and also it is much cheaper to use for small transactions, compared to Bitcoin.
Even though the prices for both bitcoin and litecoin have decreased since the end of last year, the litecoin’s situation looks better. The price for litecoin is around 490 percent higher than six months ago, comparing to bitcoin (140 percent). Moreover, according to the statistics the daily transactions for litecoin are constantly increasing.
CoinMarketCap is ranking more than 200 virtual currencies. According to the website, the total value of litecoins available for users stays on the second place right after bitcoin. Such litecoin’s status has attracted a big number of investors and enthusiasts, who are looking for new ways to profit from digital currency.
“Litecoin right now is where bitcoin was the same time last year,” Michael Curry, co-founder of Canadian digital-currency exchange Vault, mentioned in an interview. “As people are becoming more familiar with bitcoin, they are starting to see there are other coins out there.”
In just one year Bitcoins jumped from about $13 at the start of the year to more than $1,200 in December, then declined to about $490, according to Coindesk, which compares prices from major bitcoin exchanges. Litecoins, which surpassed $48 in November last year, traded for about $12 yesterday, according to data from exchange BTC-e.
Furthemore, as CoinDesk’s data shows, the average of daily litecoins transaction in April is 155 higher than October’s number. And only a 19 percent growth for bitcoins. However, as data shows the daily transactions in bitcoins is seven times bigger than in litecoins.
The usage of digital currency is growing as the users believe it’s a fast and easy alternative to traditional financial systems. Litecoins are attracting customers because they can be mined in a cheaper way comparing to bitcoin.
Sam Cole, co-founder of KnCMiner, one of the biggest mining companies, said equipment used for mining litecoins and currencies that have a similar design equals to 60 percent of sales.
The maximum number of litecoins that can be mined is four times more than for bitcoins, as a result it makes them more attractive to users.
“This will make litecoin appear more accessible, since its price will climb more slowly than bitcoin,” said Nicholas Colas, chief market strategist of a New York based trading services called ConvergEx Group.
Even though, both of the currencies are accepted at online shops, the acceptance of bitcoin is still more spread. Some merchants are not leaving litecoins aside.
“It’s time I start looking hard at it,” said Byrne, whose Salt Lake City-based company accepts bitcoins. “We certainly want to be always at the forefront of accepting such currencies.”
No one can be sure if litecoin’s longevity will stay for long. There are another 200 something digital currencies that might move bitcoin down from its current ranking. There new currencies are added weekly and most of them brings up unique feature. Though some of them are gaining attention, the investors are mainly focused on bitcoin
“Alternative currencies are great,” said Adam Draper, CEO of Boost VC. He added: “They all run into the same problem, though, which is: They are not bitcoin.”