Litecoin

January 6, 2014 Leave a Comment

For 2014, commodities trader Mark Williams predicts Bitcoin will drop to $10. In another recent poll, 56% of Bitcoin owners think the price will reach $10,000 in 2014. Break out the Tums, because 2014 will not be for the weak stomached. If your stomach can’t handle the risk, consider Litecoin. At $24 each, the most you can lose is $24 per coin.

We are going to make a bold prediction of our own. By June of 2014, Litecoin will reach $75. This is about a 300% increase over today’s price. How will this happen? Three factors will influence the move.

First, Bitcoin will have a breakout if Overstock.com follows through with accepting it as a form of payment in June. Litecoin will follow in Bitcoins coat tails. Litecoin and Bitcoin charts have mimicked each other for months now.

Second, Bitcoin will become too expensive for the cryptocurrency buyer who wants to own round numbers of coins. In the same psychological fashion that people buy a stock after a split, people will move to a less expensive option, Litecoin.

Third, Bitcoin ATM maker Robocoin will integrate Litecoin into their machines. This in only a guess, but it would seem a simple crossover.

As usual, check back in June so you can let us know if we were right or wrong.

Cryptocurrency for Christmas

December 12, 2013 Leave a Comment

This year at work, we have a $10 limit for White Elephant. I’m going to put $10 in Litecoin on a paper wallet, and wrap in up in a big box.

Cryptocurrency for Christmas is the perfect gift for that techie in your life. Most techies have heard of cryptocurrency, but not too many own them. What better way to get people involved, than forcing them to download a wallet app, and transferring the funds to their phone or PC.

The paper wallets actually look kind of cool too. Most have a QR Code right on the paper so the new owner can scan the coins right into a phone.

Stop back next week, and we will show you the easiest way to make a paper wallet for both Bitcoin and Litecoin.

Flash or Crash

December 8, 2013 Leave a Comment

During a 24 hour period on December 6th, the price of Bitcoin looked like this:

With a low price of $650 and a high of $1118, the swing was 75% down from the high of the day. All other alt coins were impacted in the same way. Litecoin was down about 50%, and PPC the same. How is this possible?

The first thing you have to realize is that Bitcoin is traded on many exchanges, and that each has their own traders. It takes time to move coin between exchanges, so you are better off just trading on one exchange. Because of this, each exchange has its own price for Bitcoin. If you check the Bitcoin ticker at the top of coinmonkey.com, you will see the range is usually about $100 from the high to the low. If there are no buyers at a given exchange, the price can swing wildly.

Because trading is spread out between exchanges, the volume at each exchange is lower than the collective daily Bitcoin volume. This means that if you trade on the smallest exchange, you could impact prices by making large trades. A ten percent increase in volume can lower the Bitcoin price by 25% if there are no buyers.

Finally, on December 6th, there was such an increase in volume, that some exchanges had a 30-60 minute trading lag. People would put in market sell orders only to see the trade executed much later at a much lower price than they hoped. This created even more selling with people believing it was the end of Bitcoin.

Prices have stabilized at about $700. So is this the beginning of a crash, or merely a flash? The key is buyers, and users. Bitcoin needs to have a continuous stream of new buyers, and people that use Bitcoin on a regular basis. If those two things do not happen, it could be the crash many have predicted.

Check back next year and we will let you know if it was a Crash, or a Flash.

VHS versus Betamax

December 7, 2013 Leave a Comment

VHS Betamax In 1977 a copy of Rocky on VHS was about $70.00. That was a lot of money back then to spend on a movie. The box to play it in could cost you over a $1000. But even before the VHS tape, and player, Sony invented the Betamax tape, and player. The tapes were smaller and offered higher resolution, but tv’s couldn’t take advantage of increased resolution so both tapes offered viewers the same experience.

Early on, Sony made a fatal flaw. With increase resolution, and sound quality, the Betamax tape could only record for an hour. If you wanted to record a 90 minute show, you needed two tapes. If you wanted to buy a movie that was two hours, you needed two tapes. Someone had to get up off that sofa and change the tape.
VHS fired back with the two hour tape, that could be stretched to six hours by reducing picture quality slightly. You could lay on the sofa for 6 hours without getting up.
The two brands coexisted for many years, until 1988 when Sony admitted defeat and began making VHS players.

Today we have a similar situation with cryptocurrencies. The two front runners are Litecoin and Bitcoin. The two coins need to adapt so quickly, that if one makes a wrong turn the other could easily become the market leader. Bitcoin is becoming VERY expensive. Some people are staying away base on price alone, not even realizing that they can buy fractions. Litecoin has less utility. It’s tough to find places to spend Litecoin. Most people that accept Litecoin for trade end up converting them to Bitcoin, then cash out more easily.

If any of the coins are going to succeed, they need to be easier to use. If you have 1 Litecoin, and want to buy a movie ticket, what fraction would you send the theater? To become a market leader, should Litecoin consider splits? When a stock reaches a certain price, many split. One share becomes two, the price is split in half. What if 1 Litecoin was always worth $1.00, and the number of coins you had was always adjusted. The way current coins work, this is almost impossible; however, innovations like this will create the market leader.

LTC BTC
Regardless of which coin wins the first battle, remember that in 2011 Blockbuster stopped renting VHS tapes, and in 2013 closed all their stores. The era of the tape was over. VHS and Betamax were both losers. In a few years the same could be true of Litecoin and Bitcoin.

Keep an eye on DVDcoin, which will probably soon be replaced by Streamingcoin and Cloudcoin!

If Bitcoin is the new Gold, then Litecoin is the new Silver

November 29, 2013 Leave a Comment

Bitcoin isn’t the only cryptocurrency grabbing headlines lately. On the heals of Bitcoin breaking $1k USD, Litecoin is soaring off the charts. Many folks who think they missed out on the Bitcoin train are now cashing in on huge returns in Litecoin. Even at $40, Litecoin(LTC) is much cheaper to buy into than Bitcoin(BTC) for the average trader. While Bitcoin is becoming popular with the masses, it still has many technical limitations(ie. transaction limitations), which makes Litecoin seem like a more viable suitor as the standout cryptocurrency.
Litecoin Chart

With cryptocurrency acceptance still in it’s infancy, only time will tell which currency will reign supreme. In the meantime, you can get in on the action trading LTC at Vircurex.