It's not just the price of bitcoin that's gone through the roof this week, the price of another cryptocurrency – litecoin – has rocketed too.
Since then, the price has dipped to a still-respectable $42.7 which, for reference, is what 0.04 BTC would cost you at the moment, according to the CoinDesk BPI.
There are currently just over 23,424,790 litecoins in circulation, so the recent price increase has brought the market cap of litecoins to over $1bn.
Litecoin was created by Charles Lee, brother of BTC China's CEO Bobby Lee, as an alternative to bitcoin. It's based on the Bitcoin protocol, but it differs in that it can still be efficiently mined using consumer-grade hardware. Bitcoins, however, are now largely mined by ASIC machines that have been purpose built to do just that.
That's not to say that such machines won't be created to do the same for litecoin. In fact, Lee thinks there's a strong possibility of this happening.
"Currently, some think that Litecoin is more fair because there’s no Litecoin ASIC but it may just be a matter of time,” he told CoinDesk in an earlier interview.
Another positive feature about litecoin is that transactions are confirmed faster than they are with bitcoin (around 2.5mins compared with around 8mins).
Cause of the spike
Members of reddit's litecoin forum have been discussing why they think the price of litecoin has increased so dramatically over the past few days.
One forum member believes the sudden interest in litecoin was caused by a tweet by political pundit and financial broadcaster Max Keiser, speculating that the price of the digital currency would increase to $50.
Others believe the spike was caused by low exchange rates between bitcoin and litecoin, so people have been using their BTC riches to buy cheap LTC.
Another argument is that people feel they have somewhat missed the boat when it comes to bitcoin. They saw people become millionaires on the few dollars they spent on BTC, so they've now invested in LTC just in case history repeats itself.
Regardless of the cause, litecoin's price increase is impressive, and Lee hopes this will continue.
“Litecoin is two years behind bitcoin in terms of our adoption, so it’s interesting to look into the future,” he said.
“If we don’t screw it up, litecoin will follow on the coattails of bitcoin. There will be more merchant adoption, and it will become less speculative and more useful," he concluded.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.