Blockchain Investor Analysis

Litecoin icon

Litecoin

LTC
Current Price $58.49 (+6.29%)
Litecoin has been a polite little brother to bitcoin since 2011. It embraced its roll as “silver to Bitcoin’s gold” early on and has stayed true to that mission ever since. Even after almost ten years in Bitcoin's shadow, Litecoin remains one of the most popular digital currencies in the market today.

Our Rating:

Market

Problem that it solves

Litecoin set out to enable peer-to-peer digital payments faster than Bitcoin.

Customers

Individuals and businesses who want a cheap and fast alternative payment method to existing options from the legacy financial industry.

Value creation

Time is money, and the decreased transaction time made possible by Litecoin’s use of the Scrypt algorithm, creates genuine value. It also takes less computing power to mine Litecoin, so it’s a more convenient crypto solution for many.

Market structure

Litecoin’s market is similar to that of Bitcoin and other major digital currencies. It rides the coattails of Bitcoin, and due to its early inception, enjoys the popularity that comes from being a convenient alternative in a market that thrives off diversity.

Market size

The market size for peer-to-peer digital payments is massive.

Regulatory risks

Some banks would love to see a blanket regulation of digital currencies. Litecoin would likely get caught in the fray if regulation came down the pike. But barring an aggressive move against financial freedom, Litecoin should remain regulation-free for some time.

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Competitive Advantage

Technology/blockchain platform

Litecoin uses a blockchain algorithm that’s more accessible than Bitcoin, and it does a good job of striking the delicate balance between ease of use and security. Litecoin didn’t seek to revolutionize the blockchain. Instead, it made an adjustment that filled a specific need.

Lead time advantage

As a well-established currency, Litecoin clearly timed things right during its inception and launch. Launching three years after Bitcoin allowed Litecoin to observe the crypto space and identify a need before jumping in. Back in 2011, the competition wasn’t as fervent as it is today, and Litecoin used that to its advantage.

Contacts and networks

Litecoin, over the good part of a decade, has established itself as a prime player, and enjoys the contacts influence that comes with that distinction.

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Management Team

Entrepreneurial Team

Litecoin’s founder, Charlie Lee, comes from Google, and he’s joined by a strong team of people hailing from various sectors of the fintech space. However, Lee is the main person 'in charge' of the Litecoin project and the person most associated to the coin.

Industry/technical experience

The Litecoin team has far more than the necessary '10,000 hours of experience.' They have weathered a few minor storms and recently undergone a successful halving.

Integrity

There was a bump in the road when Charlie Lee sold off his LTC, and the markets made Litecoin pay. Additionally, it recently became known that there are only a very small number of devs working on the project, which made many in the crypto community wonder how much we can expect from the coin in the future.

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Token Mechanics

Token required

Litecoin’s token is necessary in order to set it apart as a distinct currency. With an entirely different algorithm, a completely new token was needed.

Value added

The novelty of Litecoin’s value comes from the fact that it’s easier to mine. Litecoin has come to represent—and help support—the movement towards cryptos with fewer barriers. Its value is, therefore, both tangible and symbolic.

Decentralized

While the Litecoin blockchain is quite decentralized, the project is run by a small team that, ultimately, decide much of its framework.

Token supply

There will only be 85 million Litecoins, so it has a well-known, fixed token supply.

Public exchange

Litecoin is traded on all major public exchanges.

MVP

This once-small crypto has gone from an underling to a major player, proving its worth in the crypto-verse.

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User Adoption

Technical difficulty

A non-technical person familiar with basic blockchain principles will have no problem understanding Litecoin. It’s similarity to Bitcoin likely helped fuel its acceptance.

Halo Effect

At this point, Litecoin has its own halo. While the team doesn’t hail from a bevy of blockbuster big guys, Charlie Lee’s Google connection seems to have been enough to give Litecoin enough early momentum.

Buzz

The buzz is out there and it’s good. Litecoin’s general lack of drama helps it maintain a clean nose and largely positive press. However, the buzz factor is definitely higher at other leading projects.

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Overall Score

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Blockchain Investor Analysis

Litecoin has been a constituent of the top ten digital assets by market capitalization for the majority of its almost ten-year history. Unsurprisingly, the digital currency has received a high rating on our Investor Scorecard.

If you believe that cryptocurrencies will play a role in the future of money, Litecoin may be an interesting digital asset to look at from an investor's point of view.

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