CRYPTANALYSIS - HOUSE VIEW ON KEY ALTCOINS

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3.LITECOIN (Published: 15th Jun, 2017)

BASIC INFORMATION
Litecoin was announced in 2011 by former Google engineer Charlie Lee with the goal of being the “silver” while Bitcoin being the “gold”. The motivation of creating it is to improve upon Bitcoin. As a result, these two cryptocurrencies have many similarities.
However, despite using the same concept to develop, they do have some differences. The key one is that Litecoin is designed for faster transaction confirmation (on average 2.5 minutes), compared to Bitcoin’s 10 minutes (or more). Hence, Litecoin can handle a much larger volume of transactions than Bitcoin and as a result, Litecoin will be producing more blocks and have a limit of 84 million units.
Another key feature is that Litecoin uses the Scrypt algorithm which targets regular computers and GPUs most people already have, while Bitcoin uses the SHA-256 algorithm and relies on the raw processing power, which started an “arms race” in ASIC technology.

FUTURE DEVELOPMENT
Unlike Bitcoin’s debate, Litecoin has successfully deployed the “Segregated Witness” on 10 May 2017 without major issues. Following with this implementation, the creator Charlie Lee has announced Litecoin’s 2017 roadmap on 17 May 2017 with the highlights of smarter contracts and atomic swaps.
Smart contracts are programmes that execute exactly as they are set up to by the creating parties. Bitcoin was the first support smart contracts but it is limited to currency uses, while Ethereum shines in this area as it allows users to programme their own contracts. In the case of Litecoin, the activation of SegWit opens room for more complicated payment conditions, effectively replicating what Ethereum has achieved.
Atomic swaps mean the possibility of two people from different blockchains to exchange their tokens without consulting an intermediary. Recently another coin, Vertcoin has also activated SegWit, which allows experiments of atomic swaps between Litecoin and it. However, as Charlie stressed, this will be a slow process.

TRADE SUGGESTIONS
The price of Litecoin has experienced a significant rise since April this year, which is probably due to the announcement of the SegWit activation. However, right after the activation, it’s price had dropped from the ATH because less discussion was put on it and hence the bullish passion declined.
Still, it has solid future plans and the Litecoin Foundation established this year has raised enough funds to employ more full-time developers. On the other hand, the price of Litecoin, after the correction, has been rising again and therefore it should have the momentum to rise to a higher point in the next couple of months. Therefore, it is suggested buying Litecoin.

INVESTMENT RISKS
Other than the common cryptocurrency risks, fundamentally, Litecoin is the same as Bitcoin with nothing really new to offer, while Bitcoin is still the mainstream with the highest market capitalisation and media exposure. Specifically, the average daily transactions of Litecoin is 15k while that of Bitcoin is 300k, which is a huge difference. At the end of the day, Litecoin might not have enough features to prevail Bitcoin, then it will lose its values as it also does not have distinctive features compared to other altcoins.

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