From Stltoday.com | Make way, bitcoin: A competing digital currency is angling for the spotlight. Merchants and investors are taking notice of litecoin, pitched by its developers as cheaper to generate, more plentiful and easier to use for small transactions than bitcoin. While prices for both have slid since a surge late last year, litecoin’s remains about 490 percent higher than six months ago, compared with about 140 percent for bitcoin. Daily litecoin transactions also have climbed faster.
The total value of litecoins available for use ranks second only to bitcoin’s, according to CoinMarketCap, a website tracking more than 200 digital currencies. That status has helped make litecoin an obvious alternative for investors and enthusiasts seeking new opportunities to profit from virtual money. “Litecoin right now is where bitcoin was the same time last year,” Michael Curry, co-founder of Canadian digital-currency exchange Vault of Satoshi, said in an interview. “As people are becoming more familiar with bitcoin, they are starting to see there are other coins out there.”
Bitcoins jumped from about $13 at the start of last year to more than $1,200 in December, then slid to about $490 late last week, according to CoinDesk, which tracks prices across key exchanges. Litecoins, which surpassed $48 in November, was trading for about $12 last week, according to data from exchange BTC-e. The average number of daily transactions in litecoins this month is 155 percent greater than October’s level, according to CoinDesk data. That compares with a 19 percent increase for bitcoins. Daily transactions in bitcoins this month still outnumber those in litecoins almost sevenfold, the data show.
Technology enthusiasts and venture capitalists are pitching digital currencies as fast and cheap alternatives to traditional financial systems, in which middlemen such as networks, merchant acquirers and banks take a cut. Backers also argue that instruments such as bitcoin may be of use to people and businesses in countries with unstable currencies. Litecoins are drawing notice in part because they can be mined more cheaply than bitcoins. The process uses computers to solve software problems and unlock new digital coins. While bitcoin speculators compete with increasingly expensive machines, litecoins were designed to be efficiently mined with consumer-grade hardware, even if some miners prefer powerful processors. Sam Cole, co-founder of KnCMiner, one of the biggest mining companies, said equipment used for mining litecoins and similarly designed alternative currencies now accounts for 60 percent of sales.
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