Bitcoin will always get lots of attention, and deservedly so. However, among the altcoins, Litecoin doesn't get as much buzz or attention as it deserves. Financial news networks are quick to quote Ethereum prices along with Bitcoin prices. Getting lots of attention (although for the wrong reasons) is the XRP cryptocurrency on the Ripple network. Social media networks such as Reddit and Twitter hype memecoins such as Dogecoin and Shiba Inu. Billionaires such as Mark Cuban announce major investments in blockchain networks such as Polygon (MATIC). Left in the background is Litecoin. With those points against it, it's reasonable for anyone to ask, "Should I buy Litecoin in 2022?"
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When it comes to Litecoin, here are a few points to consider:
Litecoin Has Been Around for a Long Time
Bitcoin was released in 2009. Litecoin was released in 2011. During those years, Bitcoin and altcoins were curiosities more than anything else, and altcoins were launched as hard forks from Bitcoin.
To this day, there are altcoins launched as hard forks of Bitcoin. However, some altcoins were launched as hard forks of Litecoin. Most notable of these is Dogecoin, which was launched in 2013.
There have been several bull-and-bear market cycles in cryptocurrency since 2009. Like Bitcoin, Litecoin has survived them all and achieved several ATHs in that time.
Age alone isn't sufficient reason to go all-in on a cryptocurrency or even to devote a week's worth of pay on one. However, it's an indication of the survivability of the asset during bear markets and hiccups in areas adjacent to cryptocurrency. Litecoin is one of the early altcoins to survive into its second decade.
Litecoin Is Bitcoin with a Few Changes
MAX Supplies
Both Bitcoin and Litecoin have fixed MAX supplies. Bitcoin is famous for its 21 million BTC MAX supply. Litecoin adjusted this number to be just 4 times higher, so Litecoin has a MAX supply of 84 million LTC.
Hashing Algorithms
The developers of Bitcoin designed it to use the SHA-256 cryptographic algorithm to encrypt transactions to the blockchain. Litecoin was designed to use Scrypt instead of SHA-256.
SHA-256 makes use of computing power from either the CPU (central processing unit) or the GPU (graphics processing unit). Both CPUs and GPUs use ALUs (arithmetic logic units). Scrypt, on the other hand, makes use of large amounts of memory.
Transaction Processing
While an average transction for Bitcoin takes about 9 minutes before its recorded to blockchain, Litecoin has an average transaction time of about 2.5 minutes.
Litecoin Is Easier To Acquire
Given the demand for Bitcoin based on its MAX supply, it would make sense that there would be a corresponding supply-and-demand relationship for Litecoin: with 4 times the supply, 1 LTC would be worth 0.25 BTC (or 1 BTC = 4 LTC).
Needless to say, it hadn't worked out that way: with 1 BTC roughly at USD 50K and 1 LTC a bit over USD 150, it's more like 1 BTC is worth roughly over 333 LTC.
Litecoin can be used as a stepping stone to acquire Bitcoin. Buy as much LTC as possible at any available opportunity (with or without using DCA). When the ratio between BTC and LTC is favorable, use the LTC to buy BTC. If this works out better than directly purchasing BTC, then repeat as often as desired.
Litecoin Can Help Save Money on Transaction Fees
Different excahnges charge different rates for deposits and withdrawals. These can be made with many of the major cryptocurrencies. In the case of Ethereum, deposit fee or withdrawal fee may be waived; however, there is still the ETH Gas Fee to be paid.
Litecoin is a major cryptocurrency. It doesn't have the market cap of either BTC or even ETH, but it's still a Top 25 cryptocurrency according to CoinGecko.com.
Litecoin can be used as an alternative to Ethereum to avoid the ETH Gas Fee. Once the LTC is depositied at the exchange, use it to buy the desired cryptocurrency.
Litecoin Can Be Used as a Bridge to Many Altcoins
Many people are more comfortable buying cryptocurrencies from one source. If for some reason that source doesn't list a cryptocurrency of interest (i.e., Stellar Lumens (XLM)), it will be necessary to buy it elsewhere.
As an example, Gemini lists Litecoin but only tracks Stellar Lumens. Some exchanges offer Stellar Lumens for buying and selling. If these exchanges list both Litecoin and Stellar Lumens, use the Litecoin from Gemini to buy Stellar Lumens at the other exchange.
Litecoin Is Widely Supported
Most, if not all, excahnges-- decentralized and centralized-- list Litecoin. When buying altcoins, many of those exchanges accept payment in Litecoin. Many multi-cryptocurrency wallets include an address from the Litecoin network.
According to CoinMarketCap.com,
As of January 2021, Litecoin is one of the most widely accepted cryptocurrencies, and more than 2,000 merchants and stores now accept LTC across the globe.
With 2022 being hours away, Litecoin acceptance has either maintained that level or increased.
Litecoin Is Including Privacy Measures
Like Bitcoin, Litecoin was not designed with privacy in mind. In October 2020, Litecoin launched a testnet using a blockchain protocol named Mimblewimble in order to improve its privacy and scaling. Once testing on the MimbleWimble testnet is done and the Mimblewimble technology is incorporated onto the mainnet, Litecoin users will be the beneficiaries of more enhanced privacy and better fungibility of LTC.
Recommendation
Only Bitcoin and a handful of other altcoins have been around longer than Litecoin. Technology from Litecoin can be found in later altcoins, most notably Dogecoin.
In most aspects, Litecoin is Bitcoin with a few modifications:
- 84 million LTC instead of 21 million BTC;
- Scrypt for hashing instead of Bitcoin's SHA-256;
- Average processing time of 2.5 minutes from receiving a transaction to recording it on blockchain (compared to 9 minutes for Bitcoin).
Although Litecoin is a bit younger than Bitcoin, demand for Litecoin is nowhere near what it is for Bitcoin. This gives new cryptocurrency buyers an opportunity to stack Litecoin either for its own sake for for future swaps to BTC or other cryptocurrencies.
Deposits and withdrawals at exchanges can be costly at times, especially so when Ethereum is involved or if cryptocurrency needs to move across more than 2 exchanges. One way to reduce costs is to make deposits or withdrawals using Litecoin.
Not all exchanges list every cryptocurrency (even the major ones). When going elsewhere to buy an unlisted cryptocurrency, it's a virtual certainty that the other exchange accepts payments in Litecoin.
While Bitcoin is the most widely supported cryptocurrency in terms of merchants and stores, Litecoin also enjoys wide support for any entity accepting cryptocurrency.
Although not originally designed as a privacy coin, Litecoin is testing the Mimblewimble protocol on the MimbleWimble testnet it launched in October 2020. Once Mimblewimble migrates to Litecoin's mainnet, people using Litecoin will benefit from more enhanced privacy and increased fungibility of LTC coins.
Despite not being the no-brainer buy that Bitcoin is and not being a buy like market cap darling Dogecoin, Litecoin is a buy on its own merits. Olympic medals rank in precedence from gold to silver to bronze; regarding cryptocurrencies, their precedence is Bitcoin, then Ethereum, then Litecoin.