Text | Muzi
As the prices of Bitcoin and Ethereum broke through the 21,000 yuan mark and then fell back after hitting the 2,500 yuan mark, another digital currency that has not attracted public attention and is affectionately called "Latiao" has reversed course. The momentum was high and attracted people's attention. From June 16 to June 19, Litecoin rose by more than 80% in four trading days, and the domestic market price rose from less than 200 yuan/coin to 365 yuan/coin. This is the first time Litecoin has topped 300 yuan since it broke through 380 yuan in 2013. Although the market fell after being hit by a large number of chips on the 20th, Litecoin’s soaring trend has already begun.
Currently, the total market value of Litecoin exceeds US$2.5 billion, rising to fourth place in the global digital asset rankings. This round of price increases truly reflects the “wheel market” of the digital currency market.
As for the reason for the rise of Litecoin, some people attribute it to the attention on digital currencies brought about by the surge of Bitcoin, the representative of digital currencies. Some people attribute it to the work trend of the founder Li Qiwei, and some people attribute it to the work trend of the founder Li Qiwei. This was attributed to the Litecoin trading announcement.
1. On June 15, one of the world's largest Bitcoin exchanges issued a new announcement on the Internet, stating that the platform will launch new trading services on June 19 and officially support Litecoin trading.
2. The founder will focus on developing Litecoin. In April, founder Li Qiwei issued a letter to miners, stating that he planned to come to China in June, hoping to meet as many miners and mining pool owners as possible and talk to many miners about the future of Litecoin. new function. He recently announced that he would be resigning from the company to focus on the development of Litecoin. Immediately after the news was announced, the Litecoin Fund received approximately $12,000 in donations.
3. Bitcoin faces the risk of hard fork. If the community ultimately cannot reach a consensus on whether to expand (expand the block capacity from 1M to 2M or higher), Bitcoin is likely to split into two branches like Ethereum last year, which will have a negative impact on the currency value of Bitcoin credit. A huge hit. Data shows that the price of Ethereum plummeted by 50% due to the hard fork.
4. Litecoin has successfully activated Segregated Witness and may build a Lightning Network. According to the Litecoin team, no flaws have yet appeared, and there are rumors that it will build a Lightning Network, which may become the "second spring" of Litecoin.
5. The operations of Chinese and Korean digital currency speculators contribute more than 50% of the total transaction volume.
Bit gold, Lite silver
Litecoin has had the shadow of Bitcoin since its birth. In 2011, Li Qiwei created the digital currency Silver Litecoin. As a complement to Bitcoin, Bitcoin can be used like gold for large payments, while Litecoin can be used like silver for small payments. Moreover, Litecoin aims to improve Bitcoin.
Litecoin enthusiasts believe that Litecoin can replace Bitcoin for the following three reasons: Litecoin transactions are faster and the network can process a block every 2.5 minutes (instead of 10 minutes); The Litecoin network is expected to produce 84 million coins , which is four times the number of coins issued by the Bitcoin network; Litecoin uses the encryption algorithm first proposed in its proof-of-work algorithm. Litecoin is easier to mine than Bitcoin on a regular computer.
But compared with Bitcoin’s $44 billion and Ethereum’s $35 billion market capitalization, Litecoin is still far from replacing Bitcoin. Since its currency production frequency is higher than that of Bitcoin, its cost is only 1/4 of Bitcoin, and Litecoin has fewer payment scenarios, so it is unlikely to replace Bitcoin for the time being.
The risks behind it cannot be ignored
At present, although speculators are wildly hyping the prices of various digital currencies, the risks involved cannot be ignored.
Countries have different views on policy changes in digital currency supervision, the possibility of the consensus mechanism being cracked, and the competition and substitution faced by other decentralized, legal digital currencies. Although some countries have good policies, once a policy change occurs in a certain country, it will not affect the price of digital currencies globally, and investors may face the risk of huge losses.
In this round of digital currency gains, buyers from Asia have become the main driving force behind the sharp increase in the market prices of these digital currencies. However, China’s financial regulators have adopted a non-encouraging and non-banning attitude towards virtual currencies. Under this situation, domestic funds are flocking to virtual currencies, which undoubtedly carries great speculative risks and contributes to a larger bubble.
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