If you are a Bitcoiners that supports decentralized crypto then you should consider holding some Litecoin (LTC). Likewise, I recommend Litecoiners to hold Bitcoin (BTC) as well. Litecoin is for all intensive purposes very similar to Bitcoin in code and philosophy. Like Bitcoin, Litecoin is a decentralized crypto currency that serves as a store of value and medium of exchange. Both coins use a prove of work (POW) protocol and have a fixed number of coins that can ever be created.
Additionally, unlike alt coins such as Dash or Ripple (XRP) which compete directly with Bitcoin, Litecoin complements Bitcoin. Litecoin doesn’t market itself as a better coin than Bitcoin despite its current advantages including faster confirmation time, lower transaction fees, malleability fixes and a more even distribution of wealth. Instead, Litecoin sees itself as silver to Bitcoin’s gold.
Here is four main reasons why I encourage Bitcoin and Litecoin maximalist to hold both BTC and LTC.
Diversify Your Portfolio
While I believe that Bitcoin is the safest investment in the crypto, it is still a good idea to diversify your portfolio. Blockchain technology moves fast and I expect it to move even faster in the coming years as professional investors, financial institutions and corporations finally jump into the pool. There will be innovations, shake-ups and lots of volatility. In all likelihood Bitcoin will be around for a long time, but nothing is for certain. Bitcoin’s network could be compromised, hijacked or simply stagnate from lack of innovation.
Support a Decentralized Cryptosphere
Bitcoin’s scaling debate over the year has highlighted Bitcoin’s issue with centralization of power. In particular, a centralization of power with miners and mining hardware manufacturers.
We should not only continue to support the decentralization of miners and full nodes within the Bitcoin network, but also a decentralized cryptosphere. Supporting Bitcoin and Litecoin together would mean a greater stability for decentralized crypto. If bitcoin’s network was ever to be permanently or temporarily compromised, Litecoin could pick up the slack and vice versa. Furthermore, the simple existence of an bitcoin stand-in coin like litecoin can disincentivize bad actors from holding Bitcoin hostage. In fact, I believe without Litecoin having activated Segwit, the bitcoin scaling debate today would be quite different.
Litecoin Incentivizes Bitcoin To Be Better
For a long time, Litecoin has piggy backed on Bitcoin success by following in its footsteps. Not only was Litecoin’s creation inspired by Bitcoin, but its code is largely identical other than a few minor improvements. Historically it has also always lagged Bitcoin and has ported Bitcoin updates over to it’s own network. It was not until recently that Litecoin has taken a lead in anything. Due to Bitcoin’s recent political scaling debate, Litecoin has been able to implement Segwit before Bitcoin (essentially beta testing Segwit for Bitcoin).
Litecoin’s implementation of Segwit has shown that Segwit can be implemented safely. It has also energized the bitcoin community to push for a scaling solution and even popularized the heavily discussed idea of USAF (User Activated Soft Fork) as an alternative for reaching consensus without miner support.
This symbiotic relationship between Bitcoin and Litecoin community has been thus far mutually beneficial. Because of their nearly identical code base, Bitcoin and Litecoin can easily borrow code, test updates and share ideas with each other.
Distribution of Wealth for the People
Bitcoin’s distribution of wealth is likely heavily skewed with a few people holding massive amount of coins. Though its difficult to know for sure, chances are that early investors like Roger Verr and the Winklevoss Twins hold an insurmountable number of Bitcoins.
However if Bitcoin and Litecoin were widely held in conjunction, there would be a larger middle class and the distribution of coins would be less skewed towards a handful of early rich investors.
Investing in both Bitcoin and Litecoin reduces investment risk in your portfolio through diversification. In addition, supporting both Bitcoin and Litecoin benefits the decentralization of the cryptosphere as a whole. Bitcoin and Litecoin’s near identical code base allows for shared innovation through code sharing and safer protocol upgrades as they essentially act as test nets for each other.
The outcome of this mutually beneficial relationship between Bitcoin and Litecoin is more competitive coin with a better chance of competing with centralized crypto currencies (like Ripple) and other privatized crypto coins to come. Finally, widespread adoption of Bitcoin and Litecoin together will result in a fairer and more even distribution of coins among crypto users.
It is about time that Bitcoin and Litecoin maximalist come together and embrace both coins as the precious metals of crypto. Especially when lightning network is implemented with atomic swapping, this symbiotic relationship between Bitcoin and Litecoin will only be stronger.