In an attempt to launch Bitcoin, Winklevoss may have made investing in this virtual currency a little too mainstream for some people’s taste, there is no need to worry. The crypto community has it covered and is pumping up the next new thing: Litecoins.
Shares in CipherMine, a company that creates virtual currency Litecoin, soared 500% following their initial public offering on June 24 on a virtual stock exchange, LTC Global Exchange. Since launching less than a month ago, the UK-founded CipherMine has achieved a market value of around £500,000 ($744, 500).
CipherMine says its stellar debut is a sign that while Bitcoins are grabbing headlines, Litecoins are gaining traction.
But what exactly are Litecoins and how different are they from Bitcoins?
Like Bitcoins, Litecoins are a virtual currency created online through a process known as “mining”.
Programers and companies such as CipherMine run software programs on high-powered computer systems to find new combinations of words and numbers that will unlock new coins. The number of coins that can be mined is capped at 21 million Bitcoins and 84 million Litecoins.
Kate Craig-Wood, CipherMine’s founder, explained: “It is because of this larger number that Litecoin is often billed as ‘silver’ compared to bitcoin’s ‘gold’.”
Prices of Litecoins against fiat currencies are determined by anonymous peer-to-peer trades on online exchanges. Unlike mainstream currencies, however, they are not linked to any government, so their value rests on a trust system between users. In other words, if people suddenly decide to stop using Litecoins, they will be worth absolutely nothing.
Currently, one Litecoin is worth around $2.70. By contrast, after rising to a high of $260 in April (and falling over 60% in a day), Bitcoins are now worth $90 each.
Just like Bitcoins, Litecoins are stored in virtual wallets and can be used for purchases online. Unlike their more popular older sister, however, fewer physical businesses accept them as a form of payment. So while Bitcoins will buy you a beer in select pubs in East London, it might be trickier to pay for a drink in Litecoins.
CipherMine started trading on the Litecoin Global Exchange on June 24 when 10,000 shares sold at 0.667 Litecoins each. Shares are today worth around four Litecoins each.
Photo credit: Daily Dot