In recent years, the bitcoin market has outperformed the S&P 500.
Bitcoin is responsible for 42% of the total value of all cryptocurrencies.
The silver to Bitcoin's gold is often referred to as Litecoin.
Today, there are approximately 7,900 cryptocurrencies, with a total market capitalization of $2.7 trillion, up over 1,200 percent since December 2019. To put those gains in perspective, the S&P 500 has returned 495 percent over the last two decades.
Bitcoin: Digital gold
Satoshi Nakamoto, a pseudonymous figure, established Bitcoin (CRYPTO:BTC), a blockchain-based digital money, in 2009. You've probably heard the term before, but it's critical that you grasp what it means. Blockchain is a decentralized ledger system that uses cryptography to encrypt transaction data, allowing for electronic fund transfers without the use of a middleman (e.g. bank).
Miners, in particular, validate transactions using a consensus technique known as proof of work, which requires them to expend computational resources to solve complicated riddles. A block of transactions is uploaded to the blockchain once the puzzle is solved, and the miner is paid with Bitcoin, effectively minting fresh currency. The payout is, however, slashed in half every 210,000 blocks, according to Bitcoin's source code.
Litecoin: Digital silver
As a fork of the Bitcoin blockchain, Charlie Lee, a former developer at Google (now part of Alphabet), established Litecoin (CRYPTO:LTC) in 2011. To define the phrase, a fork happens when the protocol of a blockchain is changed. Lee created Litecoin to be speedier and more plentiful than its predecessor in this scenario.
Miners still use a proof-of-work consensus technique to validate transactions, but Litecoin blocks are made four times faster than Bitcoin blocks, which are created every ten minutes. As a result, Litecoin transactions are completed faster.
Litecoin, with a production cap of 84 million coins, is also four times more plentiful. As a result, this cryptocurrency is frequently referred to as the silver to Bitcoin's gold, and this is the essence of the investing thesis once again. Because Litecoin has a finite supply, its price should climb in lockstep with demand.
Finally, Litecoin has gained a significant degree of popularity on its own. PayPal users, for example, can trade and spend cryptocurrencies through their mobile wallet, but the fintech only offers four digital assets. That list includes Bitcoin and Litecoin. As a result, this coin appears to be a wise investment.
Why it might not matter if crypto crashes
With so many tokens breaking price records on a near-daily basis, it's worth asking: Who profits from crypto moves?
If you want to earn money with crypto investments, you need to be able to profit regardless of which way a particular token is moving on any given day.
We've discovered one firm that has perfectly positioned itself as a long-term picks-and-shovels solution for the whole crypto industry — Bitcoin, Dogecoin, and all the rest.
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