While Bitcoin has become almost synonymous with cryptocurrency, not a lot of attention is paid to the wide range of Altcoins available in the cryptocurrency market. The term “Altcoins” is derived from the term “alternative coins” and refers to cryptocurrencies that are alternatives to Bitcoin. There are over 5,000 “alternative” currencies, most of which are Bitcoin and its functionalities. Of the many altcoins, Litecoin is a cryptocurrency that closely resembles Bitcoin. In fact, Charlie Lee, founder of Litecoin, referred to it as the “silver to Bitcoin’s gold.” Litecoin also shares the same codebase as Bitcoin.
That’s not all. This resemblance even extends to the price moments and market behaviour of the two cryptocurrencies. And this resemblance is intentional, given that Litecoin was developed on the model of Bitcoin. As per the founder, there was a conscious effort to ensure that Litecoin follows Bitcoin.
This means that when there is a rise in Bitcoin rates, a simultaneously high is also recorded in Litecoin value. The intention to have Litecoin as a shadow for Bitcoin was made keeping in mind the transaction fee. For Bitcoin, the transaction fee for moving large amounts of money and also small amounts of money is the same. These could seem unfeasible for smaller transactions, create a market for the usage of Litecoin, with regard to the smaller transactions.
However, such dependence on one currency can also cause issues. For instance, if the price of Bitcoin sees a slump, it will lead to a crash in Litecoin prices as well. As Litecoin shares the same codebase with Bitcoin and mimics its market movement, an issue with the Bitcoin network can also adversely affect Litecoin’s value.
On September 27, 2021 (as of 4.00 PM) the price of Litecoin in India is Rs 12,074. Bitcoin, on the other hand, is valued at Rs 4,53,462.