Topic: Longtime bitcoiner, used to dislike Litecoin, but now think it's important & why (Read 838 times)
May 02, 2013, 08:11:32 PM
P. S. Why this belongs here instead of Alt Chains is because it's also a statement to bitcoiners: Litecoin is a possible (future?) way for you to diversify.
May 02, 2013, 07:53:31 PM
I started mining Bitcoin back in 2011, when solo mining was already not possible without a super expensive mining rig full of video cards. When Litecoin came around, it was one of a slew of different alt chains with not much to offer. It was basically, "It's Bitcoin, but..." and I figured doomed to fail like all the others. Being aware of a business concept called "Network Effects," I didn't expect it to pose any competition to an already well established Bitcoin, even with shorter confirmation times. To me it seemed like basically a worthless waste of time that offers absolutely nothing that Bitcoin doesn't already offer, being mined and pushed by certain "butthurt" individuals who felt cheated about having missed out on easy mining and being early adopters. Frankly, my opinion on that still stands.
However, recently I've come to think about individuals having to manage vast quantities of wealth, and the issues that arise with that (think people like Sheldon Addleson, worth billions). You can't keep all that in a bank or as cash, because it's not insured against theft or devaluation. Stocks are risky. Bonds are safer, but also have risk. It's a problem of figuring out where to stick your money in a way that won't make you lose a lot of it due to some circumstantial fluke. With the rise of Bitcoin price, that made me reflect on the exact same issue that people with large bitcoin wealth have, too, and that's when I realized that Litecoin can be very important, too. Not as the silver to Bitcoins gold. Frankly, with Bitcoin getting all the attention on enabling transactions, I expect that Bitcoin will be the cash, and Litecoin will be the gold-like currency, useful only for storing wealth. No, it will be important because of one very important financial and investment concept: Diversification.
So, all you plucky Litecoin investors putting money into it thinking that you can still get in on the ground floor of something like Bitcoin, sorry to disappoint you, but I doubt that Litecoin will ever be anything like Bitcoin. But it will still be very important, and kudos for being in on the ground floor.
However, recently I've come to think about individuals having to manage vast quantities of wealth, and the issues that arise with that (think people like Sheldon Addleson, worth billions). You can't keep all that in a bank or as cash, because it's not insured against theft or devaluation. Stocks are risky. Bonds are safer, but also have risk. It's a problem of figuring out where to stick your money in a way that won't make you lose a lot of it due to some circumstantial fluke. With the rise of Bitcoin price, that made me reflect on the exact same issue that people with large bitcoin wealth have, too, and that's when I realized that Litecoin can be very important, too. Not as the silver to Bitcoins gold. Frankly, with Bitcoin getting all the attention on enabling transactions, I expect that Bitcoin will be the cash, and Litecoin will be the gold-like currency, useful only for storing wealth. No, it will be important because of one very important financial and investment concept: Diversification.
So, all you plucky Litecoin investors putting money into it thinking that you can still get in on the ground floor of something like Bitcoin, sorry to disappoint you, but I doubt that Litecoin will ever be anything like Bitcoin. But it will still be very important, and kudos for being in on the ground floor.
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