Bitcoin is well above its old record, partly thanks to the digital gold story that will take place in 2020 among institutional investors. But as those getting into cryptocurrencies are considering diversifying beyond BTC, an entrepreneur and crypto trader says Ethereum is the digital version of silver, not Litecoin as it has long been called.
This is this trader’s argument as to why Ethereum is better cryptosilver than Litecoin, but why the equation still prefers the early spin-off of the Bitcoin core.
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Bitcoin is the very first cryptocurrency, designed by Satoshi Nakamoto. Nakamoto’s writings referred to gold while trying to create a digital currency that also had the properties of a commodity that would encourage its users to “collect” it.
Today there is a better term for collecting BTC: hold. The limited supply of only 21 million BTC, makes it even finer than gold and beats the precious metal in almost every way. Bitcoin cannot be counterfeited, does not need to be physically stored or transported, and can be moved at a fraction of the effort and cost, without any need for security or fear (unless you enter an address incorrectly).
The digital golden story has gained ground from the real thing, and soon investors may be looking into silver’s digital evolution. Entrepreneur Qiao Wang claims that For those wondering which crypto asset is the best fit for that account, it is Ethereum and not Litecoin.
Litecoin has long been referred to as digital silver, but Wang used a theory borrowed from Paul Tudor Jones that cryptocurrencies can be ‘precious’ or ‘industrial’ assets.
Litecoin peaked alongside Bitcoin in 2017, while Ethereum and other altcoins followed | Source: BTCUSD on TradingView.com
Which crypto asset is the better digital silver: Ethereum or Litecoin? Costly or industrial?
The analogy itself makes sense, but Wang’s interpretation of it may not match. There is no reason to ditch Ethereum in favor of Litecoin, and that’s not the point that is about to be made.
Wang says Bitcoin is “precious” and Ethereum “industrial,” but Litecoin is “neither.” But that doesn’t line up with what the community has already designated these assets.
Litecoin has already earned the nickname of digital silver and wears that crown for years. Ethereum as an “industrial” crypto asset is correct, therefore it is used as “gas” for transactions.
Indeed, silver has more industrial use than gold, for example in renewable energy. But the reason it has value is because it is considered a “precious” metal.
The definition of the term precious simply means something of great value or a high price, which is subjective to begin with. But in the context of rarity, Litecoin is the best comparison to Bitcoin, and therefore, if the story of digital gold is to be believed, there is no denying that Litecoin is digital silver.
There is no knock on Ethereum which is arguably much more valuable than Litecoin, which is why it has a much larger market cap. But for crypto investors looking for digital silver, Litecoin is the better direct comparison.
Compared to Bitcoin’s 21 million BTC, there are only 84 million LTC. It is currently the cheapest of the the four coins listed on PayPal, in which there are about 350 users.
If every user wanted to buy even one Litecoin, there would be only 0.24 LTC per user. If this kind of scarcity is one of the things that makes Bitcoin the most magical, it makes no sense why it doesn’t matter to Litecoin either.
The asset is born from Bitcoin’s code, has a similar reward halving mechanism, and more. Ethereum has a current supply of 113 million. The total maximum supply is something that no one knows, but good for a lot of gas in the future.
Featured image from Deposit Photos, Chart from TradingView.com