Litecoin In 2014: Will The Cryptocurrency Overtake Bitcoin In The New Year?

 
on January 04 2014 7:29 AM
Official_Litecoin_Logo_With_Text
Official Litecoin Logo Creative Commons

Perhaps to Nobel Prize winning economist Paul Krugman’s dismay, 2013 was by far the year of the bitcoin. News outlets covered the phenomenal rise of the cryptocurrency and investors had a rollercoaster of a year. Starting out at a measly $13, the decentralized digital buck rose to a staggering $1,250, making some people very rich. Shortly thereafter, it fell again to where it remains today, around $800. With prices already high, will investors want to get into the bitcoin game now, or will they search for other currencies to press their luck? Is 2014 going to be the year of the litecoin?

Litecoin is an alternative currency (commonly called alt coins) very similar to bitcoin; some call it the silver to bitcoin’s gold. They both have an amount cap so as the market doesn’t get over saturated. They both are mined using application-specific integrated circuits (ASIC rigs) and high-powered graphics processing units (GPUs), and they both are used as a payment method and traded on open markets as a way to make money. Bitcoins are accepted much more widely than any other alt coin, but are still nowhere near the universality needed to be a generally accepted currency.

The difference is that litecoin sits at where bitcoins were last year this time. Currently litcoins are trading at around $24, a little higher than where bitcoins were January 2013. Interested parties who missed the bitcoin bandwagon, or who got in too late to make serious cash, are looking at litecoin as the new best thing. The opportunity exists to get in early and make some money as the currency jumps to reflect a closer relationship to bitcoin, which has been written about before.

However, trends exist in the litecoin world that didn’t exist for bitcoin as it rose in value, specifically when it comes to mining technologies. The aforementioned GPUs and ASIC rigs are out of stock in many stores. New specially built mining computers are coming onto the market, already designed with litecoin in mind. Alpha Technologies announced this week that they are beginning to take pre-orders for their litecoin specific ASIC machines. With bitcoin, miners had to build their own devices as the process of mining was evolving with the rising value.

Lessons were learned with bitcoin that are now being utilized with litecoin, some to our detriment. Prices for GPUs have risen in response to market demand. Whereas graphics card companies like AMD Radeon and NVIDIA normally have bidding wars, trying to outsell each other in a back and forth seesaw of cutting prices, the new higher demand has actually raised prices for the companies instead of lowering them. And that can be directly related to litecoin.

Litecoin is also having an impact on the way bitcoins are trading, which is conversely what most expect. Thursday saw a rise on litecoin trading followed by a rise on bitcoin trading, exactly the opposite of the status quo. Normally, bitcoins lead the path, but with more investors focused on how litecoin will do in the new year that may change.

This year may see the boom of another altcoin, or potentially the false hope to many eager investors. After all, when Paul Krugman suggests bitcoin might be a bubble, the next Dutch Tulips, maybe someone should listen.

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