Why Litecoin imitates Bitcoin?
Lee started Litecoin because he knew Bitcoin’s flat transaction fees made transferring small amounts difficult. “If Bitcoin can handle high-volume transactions, it will have higher fees and be more secure. Litecoin can be used as a token. Some cash can also be used,” he said. In 2018, the Litecoin Foundation, a Litecoin-related nonprofit, acquired 9.9% of German bank WEG, paving the way for cryptocurrencies to enter big banks.
Bitcoin is now the source of many cryptocurrencies, and Bitcoin itself is encrypted. But when creating Litecoin, Lee worked with Bitcoin’s source code. Instead, it extends the original Bitcoin code with new functionality.
For example, Litecoin has a larger block size than Bitcoin and processes transactions faster. He said Bitcoin is trusted and its code was created for a reason. “There are a lot of people who don’t realize what they are changing and change their posture and get caught or someone punches them in the face,” he said.
What are the flaws in my approach?
Lee’s strategy has two major weaknesses for him.
First, Litecoin’s price reflects Bitcoin’s price volatility, with a few exceptions. This means that Litecoin is not as attractive to investors as Bitcoin as it is not that different from standard cryptocurrencies. No wonder Litecoin ($10.2 billion market cap) will be lower than Bitcoin ($891 million) on December 30, 2021.
Second, report Wikipedia mistakes to your followers. In an interview, Lee said he was concerned about bugs that could erase Bitcoin network nodes and invalidate their value. Litecoin is directly affected by such outages as it uses a common index to reflect Bitcoin’s price fluctuations.
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