Editor’s note: Andrew Torba, a bitcoin fan and CoinDesk contributor, shares his insight into the relationship between litecoin and bitcoin. Article originally published on medium.com.
It’s been an exciting week for bitcoin and litecoin. At the time of writing, bitcoin was up 4.36% in one hour alone, topping off at $944.99 on Mt.Gox. In terms of growth over the past month, Litecoin is off the charts: surging from $4 at the beginning of November to a new high of $16.86.
In trading, this is what’s known as a ‘sympathy play’. This term is used when a stock, or in this case a digital currency, follows another stock’s path.
As a rule, sympathy plays tend to lag behind the main play, so it’s likely that we will see litecoin piggyback on bitcoin’s recent success. This could either stabilise bitcoin, or it could potentially slow down its growth.
I’ve been following litecoin closely since October and I think it’s safe to say that litecoin is experiencing its shining moment. Max Keiser agrees:
Litecoin ($12) is up more than 100% since we recommended it last week. We are sticking to our $50 interim target.
— Max Keiser (@maxkeiser) November 25, 2013
People are speculating that litecoin may be ‘the silver to bitcoin’s gold’. Some argue that as bitcoin’s value rises over time, smaller currencies will become more common for everyday transactions.
Think of litecoin as the change in your pocket, and bitcoin as your large assets and savings. The biggest argument from the bitcoin community against litecoin is that bitcoin’s ability to be broken down into uBTC (fractional pieces of one bitcoin) may render litecoin obsolete.
Of course, this will only happen if the world selects bitcoin as its digital currency of choice. I see a future where multiple digital currencies are being utilised by different parts of the world. Maybe I’m right, maybe I’m wrong, but what would need to happen for litecoin to gain traction?
As adoption increases, you can see quickly where microtransactions become important in daily life.
At the time of writing, there are over 1,060 merchants currently listed on the coinmap.org website that accept bitcoin. The site is adding roughly 50-100 new merchants each day.
When this happens, expect to see massive growth in both litecoin and bitcoin. Adoption by these exchanges will also make it easier for merchants to start accepting litecoin.
Many of the businesses listed on coinmap.org already utilize Coinbase for transactions, including the Subway owner I visited last week, so it would take only one app update for litecoin merchant adoption to be instantaneous.
Recently, I even found a local guitar shop that accepts bitcoin. I will be visiting later this week to get the owner’s thoughts on both bitcoin and litecoin.