Charlie Lee, the creator of Litecoin [LTC] and the Managing Director of Litecoin Foundation spoke about the intrinsic value of Bitcoin and altcoins, during the Blockchain Cruise Conference.
The creator of one of the top cryptocurrencies in the market spoke about Bitcoin [BTC], Litecoin [LTC], and Ethereum [ETH] while he was discussing ‘the intrinsic value of altcoins’. According to him, transactions on Ethereum is not immutable as opposed to Bitcoin and Litecoin.
Charlie stated that even if the cost of reversing a Litecoin transaction is cheaper than that of Bitcoin’s, the cost is still “very expensive”. This is the main reason he has always urged people to use Litecoin for smaller payments and Bitcoin for larger payments because the user will depend on the security and immutability of Bitcoin.
In addition, he spoke about the cost of production of Litecoin. He said:
“Cost of production: Litecoin is cheaper to produce, but still a high cost, about $50 to produce a Litecoin today.”
Charlie continued to speak about the fixed money supply of Litecoin. He stated that Litecoin’s money supply is similar to that of Bitcoin which happens every four years. The total supply of Litecoin will be 84 million coins, which is never going to change. The creator said that even if he wanted to change it, he would not be able to as the users would revolt and this is why it will always remain the same.
Furthermore, he spoke about Ethereum and stated that it is “most people’s favorite altcoin”. According to him, Ethereum is censorship resistant and he believes that there is a lot of “security around it”. He said:
“It’s hard to see certain transactions but the problem with Ethereum is, we have already seen it, we have already shown and proven that transactions on Ethereum is not immutable for most cases it is.”
Charlie quotes the DAO hack as an example for his statement. The DAO hack marked the split of Ethereum [ETH] from its original blockchain, now called Ethereum Classic [ETC]. The majority of the community and developers had decided to fork the block in order to stop the hackers from stealing the tokens.
He continued to say that it is actually a good thing as the money is taken away from the thieves but it “actually hurts” the properties of sound money. Charlie said:
“It sets a bad precedent that governments can approach the foundations of developers and convince them that this transaction is bad because it’s sending millions of dollars to a terrorist group. So, no one likes terrorists but for properties of sound money is important that transactions are immutable.”
Moreover, the creator added that once it is just proof of stake for Ethereum. The cost of production would effectively go to zero and this would hurt some projects. He also spoke about the recent block reward for the miners where the community and the developers decided to decrease the reward to 2e from 3e.
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Fall in Bitcoin’s market dominance may be correlated to the fortunes of the altcoin market
The trends set by virtual assets have always highlighted the cryptocurrency market’s inherent volatility and spontaneity. Prices lack symmetry and rarely exhibit consistent growth as different factors come into play to dictate an asset’s valuation.
At press time, the world’s largest crypto, Bitcoin, had stormed past the $11,000 mark and was consolidating to push for a surge over $12,000. The rest of the altcoin market however, apart from one or two minor hikes here and there, has been relatively quiet after collectively surging in the early part of the year.
At the beginning of 2019, a significant number of crypto-assets performed significantly well in a group, wherein most assets demonstrated a prominent hike in their values with little to minor price corrections.
A majority of tokens doubled their valuation until Bitcoin breached the $6,600 resistance. Subsequently, altcoins failed to keep pace as Bitcoin continued to test more resistance limits in the market.
At present time, Bitcoin enjoyed an unprecedented 62 percent dominance in the cryptocurrency market. As its dominance primes itself to climb over the 63 percent mark, many in the community speculate this could be red flags for the altcoin market.
Major cryptocurrency enthusiasts and analysts have stated that altcoins could significantly capitulate if it so happens. However, past events offer a sliver of hope for the altcoin market.
According to CoinMarketCap, the altcoin market has been significantly affected whenever BTC’s dominance has fallen. During the bull run of 2017, Bitcoin enjoyed a dominance of 65 percent and the global market cap hit a value of $402 billion. However, in January 2018, when BTC dominance plummeted, the global market cap peaked at around $710 billion. The dominance was down by half, whereas the global market cap had almost doubled.
A major reason for the same was money funneling into other altcoins after witnessing a shift in momentum from Bitcoin to the rest of the crypto-market. The present market situation may take a similar path once BTC’s dominance falls, opening the door for other virtual assets to take advantage of the scenario.
However, the present rise of BTC is backed by much more certainty than the bull run of 2017. Hence, a repeat of the January 2018 period may be unlikely, and will happen if and only the market sentiment shifts gears drastically towards altcoins.
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