Every day, more cryptocurrencies arrive on the scene, boasting new approaches, new purposes, and new associations with companies (chiefly through ICOs) and assets alike. But if you’re sensibly risk-averse and looking to move your business into the cryptocurrency game without taking too large a gamble, the closest things to a safe bet are Bitcoin and Litecoin.
Thematically, these two leading contenders can be considered two sides of the same coin. Bitcoin was the pioneer, the trendsetter, the nugget of gold that sparked a fevered rush, and Litecoin was designed specifically to serve as the corresponding silver — a cryptocurrency with a lower value but more widespread distribution and everyday utility.
But which one of these two options is a better fit for your business? Well, that’s an interesting question, and it depends on various factors. Let’s take a closer look at the matter.
Choosing A Currency For Investment
There are plenty of businesses treating the cryptocurrency scene as a like-for-like substitution for the stock market, and it can be a highly successful approach. The level of volatility in the still-developing scene ensures that there are opportunities for savvy traders to profit significantly through buying and selling at the right times. If that’s the kind of activity you’re looking to engage in, then there’s no meaningful incentive to choose one cryptocurrency in particular. You can (and perhaps should) be considering any and all cryptocurrencies that hit the scene.
If you’re planning for investment, however, with the intention of buying a significant quantity of cryptocoins and holding on to them in the hope that you’ll be able to sell them for a large profit down the line, then the difference between these two currencies so far seems fairly negligible. This is because the market valuation of Litecoin has closely followed that of bitcoin (not tremendously surprising given the inherent association).
If you have to pick one, though, it makes sense to pick bitcoin. It’s better known and has been around longer, pushing it closer to stabilization — particularly since it is already accepted as a currency by many online payment systems and e-commerce content management systems (since the end of 2013, businesses built on Shopify have supported it by default). Litecoin’s destiny seems unlikely to diverge significantly from that of its bigger brother, so a collapse of bitcoin would likely end up sinking Litecoin as well.
Choosing A Currency For Full Adoption
You might not have any intention of making money from cryptocurrency. Perhaps your goal with entering the crypto world is to embrace the underlying benefits that led to its creation — secure and decentralized transactions that exist outside of the control of irresponsible financial organizations. If you intend to choose just one cryptocurrency to back your entire operation, which one is the more sensible choice?
Well, as noted, online retail has already begun to view bitcoin as a stable proposition, which may lead you to think that bitcoin is also the better choice here — but I’d actually suggest otherwise. The same bitcoin association that limits Litecoin also empowers it with corresponding stability. As long as bitcoin sticks around and Litecoin attempts to chart a course alongside it, the two should have similar paths overall.
But what actually renders the two distinct in this area is the explicit difference in operation. Litecoin was created to function with much faster transactions (taking a quarter of the time of bitcoin transactions), leading to smaller backlogs and reduced transaction fees. While the gulf in mainstream support between the gold and the silver might well be closed in time, the difference in architecture will likely continue.
The main reason for this is that the two target different things. Much of bitcoin’s value comes for the prohibitive difficulty of acquiring it, and that difficulty is tied to some extent with the transaction process through the proof-of-work model. Might it change in the future? It’s possible, yes — but bitcoin doesn’t need to be an everyday currency to hold its value, and attempting to make it one might end up diminishing its significance. Because of this, Litecoin is the better choice for a business that plans to make frequent transactions.
Letting The Situation Develop
Just as gold has historically functioned as a solid asset to underpin the more readily-distributed silver, Bitcoin and Litecoin can come to dominate the cryptocurrency world together. So does this mean you should choose one of the two? Not quite, in my opinion. I believe the field is still far too young to make any solid predictions.
As such, unless you have a pressing need to choose one over the other, my suggestion is that you wait a while to see how things develop. In the meantime, you can dip your toe into the world and try different things to see how you like them. Just don’t put all your eggs in one basket quite yet — in the coming years, it should become much clearer which cryptocurrencies are going to become viable contenders to current government-backed currencies.
About the Author : Patrick Foster is a writer and ecommerce expert from Ecommerce Tips — a forward-thinking advice-centric blog with the goal of helping ambitious businesses and entrepreneurs get ahead in the online retail world. You can check out the latest posts on Twitter @myecommercetips.
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