Bitcoin is worldwide famous, but with its existence, it was inevitable other cryptos would appear, such as Litecoin. What is happening with it, and how does it impact the economic and political relations between America and China? Can we compare its approach to it and the different ways the two countries benefit from it? Thousands of cryptos came to life after Bitcoin, but few of them stay on the top, while others are existing but aren’t very useful, or they disappeared. Litecoin is considered “the silver of Bitcoin”, and many people like to invest in Litecoin since it’s easier to mine and its primary purpose is to make transactions faster, rather than focusing on becoming a new currency everyone will use everywhere.
The creation of Litecoin
Ex-Google employee Charlie Lee created Litecoin. He wrote the code for Litecoin blockchain when Bitcoin caught his attention in 2011. He made it possible to be mined within 3 minutes, while Bitcoin took much longer (around 10 minutes for every new block). Lee himself was creating Litecoin in his spare time, so he likes to call it something fun when compared to Bitcoin. Litecoin’s goal is efficiency and peer-to-peer operations that won’t cost anything. People actively trade Litecoin, and its cap is a bit over 3 million dollars. Its trading volume is about a million dollars more, and roughly 65 million coins are circulating in the world. It’s ranked number seven among the top 10 cryptos in the world.
How China sees Litecoin
If we want to put a perspective between America and China, it’s best to see historical events regarding cryptos. In China seven years ago, in 2013, when Litecoin started to gain attention, but suddenly it’s price dropped over 400%, a few days later, it rose to 48$. There are lots of theories why and how this happened, where many claim a simple tweet contributed to it. Namely, Max Keiser, a financial broadcaster, stated that Litecoin price might reach around 50$, which prompted Litecoin to come to a price of 48 dollars. There comes a further explanation or rather another theory that this happened because exchange rates involving Bitcoin and Litecoin were somewhat favourable. China didn’t like where this was going, and in December 2013, Bitcoin fell a lot affected Litecoin so much that the price was around $13. Yes, from 48 to 13 dollars in just a month. This was the consequence of Chinese regulators, who decided to ban any of their banks from doing transactions, including Bitcoin. Crypto trading in China was in serious trouble.
What happened in America during these times
As we said, Bitcoin’s price fell quickly as soon as the ban was in motion in China. Many traders thought this was the end of the Bitcoin era, and there was nothing that could fix it. What changed it, then? The American views on cryptos at the time. In 2013, Americans thought that cryptos could prevent money laundering and any murky transactions on the internet. Bernarke used the opportunity to send a letter to US senators where it was stated that the Federal Reserves have no authority over cryptos (therefore we have decentralized market and apps). While the letter mentioned there are risks of problematic situations including cryptos, there are a lot more positive aspects of it they should focus on, long-term.
Many relied on Bernarke’s statement, and that’s how Bitcoin got it’s boost again, where Litecoin, being connected to it, profited as well and came back to 50 dollars before it crashed in December.
Cryptocurrencies are influenced by the global market, no matter how much we would like it to be different. Politics and various regulations in every country, depending on their views on crypto, can change the value and its overall way of trading, depending on what they propose. That’s why it’s essential to stay informed and see how different nations perceive and adopt cryptos.