Forbes: A $100 Worth Of Litecoin A Year Ago Is Worth $30,000 Today
I don’t usually do disclosures, but for the sake of it, I do have litecoins, and I’ve recently gotten a mining rig (small addition). I must say that the great increase has greatly helped me in getting this site up and running, I might have had to throw in the towel earlier otherwise. I’m not a millionaire, I’m very very far from that, but like Charles Lee,
““I’m sure there are Litecoin millionaires out there,” says Lee, indicating he’s not one of them.
I would have to say, they are probably not so far away as some may think.
Forbes has had quite the early love for litecoins
I don’t want to detract from the actual article, so here it is:
Kashmir Hill, Forbes Staff
Welcome to The Not-So Private Parts where technology & privacy collide
1/13/2014 @ 9:00AM |28,938 views
A $100 Worth Of Litecoin A Year Ago Is Worth $30,000 Today
Last month, we subjected readers to a hindsight lament: How you should have spent $100 at the beginning of 2013. Using the Forbes time travel machine, we went back to last January and dropped Benjamins on a slew of investments, including gold, Google and Bitcoin. We thought the best choice was Bitcoin, which was worth 50 times as much by year end, but we were wrong. The best way to spend a c-note on January 1, 2013 was on competing cryptocurrency Litecoin. Worth seven cents then, its value increased along with Bitcoin’s, reaching $23 by December, or 328 times its initial value. That means a $100 investment in Litecoin last year would be worth $30,000 now.
Litecoin is one of many alternative cryptocurrencies — or altcoins — that have popped up in Bitcoin’s wake. The creators of at least 70 different altcoins took Bitcoin’s source code and tweaked it. They created BBQCoin and Coinye — much to Kanye West’s disapproval — and Dogecoin — based on a meme — and Stalwartbucks — as a journalistic exercise from Business Insider. The Washington Post’s Timothy Lee has a nice explainer on why people are creating these. Some are serious; some are not. But that’s the thing that makes people so skeptical about digital currencies: they’re pretty easy to create out of thin air. They remain as valuable as thin air until people invest faith in them, by loading code onto their computers and participating in their networks, or by spending actual money to buy them.
Litecoin, created two years ago, is one of the more serious altcoins, with a $600 million market cap. The infrastructure around it is not nearly as developed as that around Bitcoin, with few exchangers and processors and far fewer sites devoted to analyzing its activity and market fluctuations. BTC-e, an exchange based in Bulgaria, is one of the few institutional places where you can buy it. But optimistic speculators are hoping for the same spectacular returns from LTC as BTC given the way it’s following in big brother Bitcoin’s footsteps. Like its big bro, Litecoin is making a name for itself initially by hanging out on the corners of black markets. The Target credit card thieves, for example, were willing to take it in exchange for stolen financial deets. And like Bitcoin, it’s subject to dramatic thefts, criminal schemes, and excitement around merchants accepting it online.
Charlie Lee, the Satoshi Nakamoto of Litecoin
“It’s a year and a half behind Bitcoin in age and maturity,” says Litecoin creator Charlie Lee, 36, who was at Google when he released the Litecoin code to the world in October 2011, but is now an engineer for Coinbase, a Bitcoin start-up in San Francisco. “Litecoin is the silver to Bitcoin’s gold. It has taken 2nd place in digital currency because it was created early and it was fair.”
Litecoin is designed to produce more coins than Bitcoin (84 million total) and to create them four times as fast. Transactions (and the rewards to miners who facilitate those transactions) happen every 2.5 minutes, rather than every 10 minutes as with Bitcoin. Lee replaced Bitcoin’s hash-based mining process with a scrypt-based one that’s (hopefully) harder to ramp up with specially designed computing equipment, in the hopes that Litecoin won’t have the hardware arms race that’s happening in Bitcoin right now. That race was recently addressed in a BusinessWeek cover story, which was fronted by a unicorn scene that could have been ripped from a Mercedes Lackey fantasy novel, in a nod to the surreality of invented money systems that are making people rich.
Litecoin has not made Lee rich, he says. “When I released Litecoin there were a lot of other cryptocurrencies that were pre-mined by founders wanted to be super rich. I preannounced Litecoin on Bitcointalk, so people could mine it from the get go. It was more widely distributed from the start than Bitcoin,” says Lee.
Bitcoin’s mysterious creator Satoshi Nakamoto appears to own over a million of his coins, or $1 billion worth, mined in the currency’s early days, though he hasn’t touched them in years. Lee’s not such a large holder of Litecoins. ““I’m sure there are Litecoin millionaires out there,” says Lee, indicating he’s not one of them. “I’ve sold some along the way. I sold a lot of Litecoin when they were 20 cents. I’m not the best person to ask when to buy or sell.”
Litecoin investors say they are hedging their cryptocurrency bets or that they got in because they think the rising Bitcoin tide will lift other altcoin boats.”I had been watching Litecoin for months to make sure it wasn’t another pump and dump like many altcoins,” says one investor who jumped in this fall when Litecoin was around $4. “I decided to buy litecoin because I figured if Visa and Mastercard can coexist so can bitcoin and litecoin.”
Nakamoto may have kept his identity under wrap because he feared governments coming after him for creating a currency that could be used on black markets or for money laundering. The feds haven’t come knocking on Lee’s door yet. “So far, no calls from the government,” he says. “I’m just working on it as a side project, not controlling the currency or anything. It’s open sourced and decentralized. I don’t think there will be any problems.”
Lee is not the only one in his family banking on cryptocurrencies. He introduced his brother Bobby to Bitcoin, and Bobby went on to become the CEO of BTC China, previously the world’s largest Bitcoin exchange.
Lee designed Litecoin because he wanted to make a better Bitcoin — faster, more efficient and more democratic in wealth distribution — but he doesn’t expect it to kill Bitcoin.
“Litecoin versus Bitcoin is like Facebook versus Google Plus,” says Lee. “It would be hard for Plus to overtake Facebook. But if something catastrophic happens to Bitcoin, I could see Litecoin positioned to overtake it.”
Depending on the nature of the catastrophe, Litecoin might go down with Bitcoin rather than overtaking it. If the world collectively loses faith in cryptocurrencies, Litecoin will be LitesOutCoin, along with all the rest.