What About Litecoin?

The advent of Bitcoin was obviously a huge step forward for crypto currencies, but as with all new developments, those that come after can improve upon the initial concepts.

In the case of alt coins, Litecoin was the next step. Its founders used many of the same concepts but simply added some tweaks to create improvements. This means that Litecoin shares many of the same protocols as BTC. For example, it is peer to peer and open source.

However, the founder, Charles Lee, created it in the hope of improving upon BTC with several clear differences. The most obvious to lay people is that the total amount of coins to be created by the algorithm will be 84 million (four times greater than Bitcoin). This factor alone may make LTC a much more usable digital currency for the long-term.

The second important difference is that the processing time for a block (authenticating transactions) is aimed to be every two and half minutes instead of every ten minutes. This should allow transactions to be processed more quickly.

The cryptography is slightly different as well, using scrypt1. The original aim was to enable miners to mine both BTC and LTC at the same time. Considering that the mining experts I have spoken to explain that to mine BTC a mining rig needs to work at 100% processing speed constantly, it is not clear to me how both coins could be mined, but that is one of life’s technical mysteries for the true geeks…

The rate of creation of coins will halve every four years, with coins being created at a rate of 840,000 blocks in those four years.

Related Articles

What Is Bitcoin?

A Beginners Guide To Bitcoin Mining

The Coming Blockchain Revolution

What Is A Bitcoin Worth?


At the time of writing, Cryptsy.com lists 170 crypto currencies with Litecoin having the second largest market capitalisation. While it is much less valuable than BTC, it’s value rose quickly in 2013 and it has become a serious player.

The real question will be whether the increasing rate of adoption for merchants accepting BTC will also extend to LTC. If it does, then LTC has a real future and may one day become a very important element of the internet economy.

One serious issue faced by LTC though is that it does not have the wide base of evangelists that BTC does. In fact, some of the founders of Litecoin are more often involved in higher profile Bitcoin projects. There is more funding, more fame, more fortune to be attached to the main coin.

This means that LTC really does live in the shadow of its older brother. Until this can be changed, it looks less likely that there is a real future. However, the coins are much cheaper, so if there is a real future, they probably make a very interesting speculative punt!

However, for people buying for longer term investment, or perhaps looking to diversify away from stock market investment, then Litecoin, or one of the other smaller alt coins, such as Dash, or perhaps Ethereum, might be both intellectually and financially rewarding.

The Coming Blockchain Revolution

As time rolls along, something is beginning to become clear, the revolutionary impact of Bitcoin will go further than the creation of new digital currencies. More and more technologists are beginning to realise that the layer of authentication that Bitcoin rests upon, the blockchain, can be used in many other ways1. The impact of Satoshi Nakamoto will be much more far reaching than just on money!

In tech terms, venture capitalists and entrepreneurs are looking not only for a new disruption, but also for a platform. They have learned the lesson taught by Apple and everyone wants to have their own “ecosystem”.

The blockchain is a new platform that enables so much2. By publicly distributing authentication, the blockchain is central to all the new crypto currencies, but what else might be possible?3

In late 2015 Goldman Sachs applied for patents relating to the blockchain. It is interesting to think that an investment bank of their size is interested, but actually there are many large financial institutions that are investigating closely.

One reason for this is that there is a growing belief that the blockchain can replace stock ledgers – in other words, the holdings of company debt and equities could be recorded using this technology. This has the potential to cut out “the middle man” in financial services, so if stockbrokers thought that the internet had made their business difficult, they are going to have an even tougher time to come!

This all makes sense of course – a distributed and virtually impossible to fake ledger is a great advance for finance.

Related Articles

What Is Bitcoin?

A Beginners Guide To Bitcoin Mining

What About Litecoin?

BitcoinFastStart Homepage

One of the newest innovations is namecoin4. Not only is it an alt coin, but it is also being established as an alternative to the current system of domain registration. By enabling a distributed domain registry (using .bit as the suffix) it makes it possible to sidestep attempts at censorship. It will be virtually impossible to take down a website that is distributed globally.

Obviously, this can be used for good and evil. There are probably many ways that criminals can use this to sell illegal goods, but as was seen during the Arab Spring, totalitarian governments have a history of trying to interrupt the internet access of their population. While this would not necessarily solve the access problems of the masses, it would make it much harder – probably impossible – for them to take down websites that they disagree with.

Namecoin certainly looks as though it would be another big step for online privacy and anonymity, especially when combined with Bitcoin.

What Is The Best Bitcoin Alternative From The New Alt Coins?

Let’s be clear, Bitcoin isn’t the only game in town when it comes to digital currencies. In fact, there are many new alt coins that have been released into the wild as technologists hope to launch something successful and have the advantage of being a very early miner (thus mining the coins when things are easy and creating their fortune).

Considering that Bitcoin was first created in January 2009, there have been a lot of competitors that have launched since then. At the time of writing (mid 2014) there are more than one hundred other crypto currencies.

It is my opinion that Bitcoin will eventually be the digital equivalent of gold. There seem to be too few coins created in the early algorithm for everyone to really be able to use it. To me, at least, this means that it will become a form of wealth to be stored and hoarded rather than spent.

Litecoin seems to be a more plausible crypto currency for the masses since there will be four times the number of them mined. Perhaps Litecoin will take the role of silver? Also an investment but much more usable (information here).

If that were to pass, which would then be the best Bitcoin alternative? In early 2014, Dogecoin made a splash in the new alt coin world and has become very popular, very quickly. It is helped because it became an instant hit on reddit.com1 which has more than 100 million visitors per month. That is how to gain traction!

What is amazing is that Dogecoin users have essentially created their own language to accompany the coin. Traders are called “shibes”, everyone is hoping for big price rises – they say “to the moon!” and they use generally odd sentences, “much money, wow currency” and the like.

Dogecoin is helped by the fact that there will be no maximum number in the algorithm. The number of coins that can be mined has a pre-set number and an annual limit. In 2014 around 100 billion coins will be mined with another 5.2 billion annually thereafter2. This sounds much more like a useable coin for everyday transactions. Or to put that another way, it sounds like government printed cash.

Related Articles

What Is Bitcoin?

Is Bitcoin Just About Crime And Money Laundering?

A Beginners Guide To Bitcoin Mining

The Coming Blockchain Revolution

BitcoinFastStart Homepage

New national alt coins
In addition, there have been national digital currencies released3. Countries such as Israel, Iceland, Spain and Poland now have their own coins. Whether these will catch on nationally around the world, who can say. However, there seems to be opportunity for interesting local trading and transactions.

As the euro stuttered after the 2008 financial crisis, there were many small regional currencies created in the hope of stimulating local trade and insulating the economy from wider financial shocks. Perhaps there is a role for crypto currencies in this world?

Time will tell
The reality, of course, is that we do not yet know the best Bitcoin alternative. This space is still very young and there is much more evolution to come before things really settle down and trade is able to grow dramatically. When that happens, the world of alt coins and their exchanges will look very different to today. The challenge will be to roll with it and keep up so that when the dust settles, your holdings are valuable and have appreciated significantly.

Is Bitcoin Just About Money Laundering And Crime?

There is no denying that the early years of Bitcoin were associated with crime. This is in large part because of the quasi-anonymity that transactions have. There were – and probably still are – lots of freedom loving users who used the new and little understood crypto currency to buy and sell goods and services anonymously online.

When the anonymity of TOR (a program that hides the location of your address from other people), free anonymous email addresses and Bitcoin were combined, many criminals viewed it as an opportunity. This became their opportunity to sell illegal goods online to a worldwide audience and hopefully not be caught.

This lead to the creation of a number of underground websites, such as Silk Road, that can only be accessed via TOR. These sites specialise in selling things like drugs, guns, weapons and identity theft kits1. The public was neither really aware of Bitcoin, TOR or Silk Road, which meant that it was underground in a very real sense.

Considering the wide range of goods and services (such as assassinations and prostitution) that were available, it seems easy to believe that many people were also using it to get around money laundering laws.


Money laundering prevention is overseen globally by the Financial Action Task Force (FATF). It’s description of Mission is as follows:

The FATF is an inter-governmental policy-making body whose purpose is to establish international standards, and develop and promote policies, both at national and international levels, to combat money laundering (ML) and terrorist financing (TF).

It was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering.

In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.

Since its inception, the FATF has operated under a finite life-span, requiring a specific decision of the Task Force to continue. The current mandate of the FATF (for 2004-2012) was subject to a mid-term review in 2007-2008 and was reaffirmed and revised at a Ministerial meeting in April 2008.

The priority of the FATF is to ensure global action to combat money laundering and terrorist financing, and concrete implementation of its 40+9 Recommendations throughout the world. Starting with its own members, the FATF monitors countries’ progress in implementing AML/CFT measures; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the 40+9 Recommendations globally.

—–End of Note—–

In mid 2013 Silk Road was taken down by the FBI in the United States. What seemed to be amazing to most people, including your author, was that of all the hard to reach places in the world that the site could have been run from, their prime suspect was based in San Fransisco! On one hand, it seems obvious that a successful tech start-up should be in San Fransisco, on the other hand, that seems like lunacy.

Once details began to emerge in the media, especially when they related to the millions being held in the Bitcoin wallet of the man suspected of running the site, it seems that the size and scale of the operation was much larger than many could imagine2.

The wallet associated with transactions through Silk Road was seized by the FBI – they soon announced that it contained 174,000 BTC. This was tens of millions of dollars worth of commissions paid on transactions, so you can imagine just how much changed hands in total.

The owner and operator of the site used the handle Dread Pirate Roberts3, often shortened to DPR. The man charged is Ross Ulbricht (at the time of writing he has only been charged)4.

In terms of the history of Bitcoin, the Silk Road marketplace played a major role in its early adoption and use. The reality though is that the currency was not only about crime and money laundering. In many ways, closing the site and announcing it so publicly was a good thing for the adoption of the crypto currency. In the short-term, the price per BTC dropped alarmingly on the major exchanges. However, just a few months later the stigma of being attached to the criminal underground was forgotten and it was becoming much more mainstream.

Related Articles

What Is Bitcoin?

What Is A Bitcoin Worth?

What Is The Best Bitcoin Alternative From The New Alt Coins?

How To Stay Informed About Bitcoin Latest News

Bitcoin And Liberty

Book Review: CryptoCurrency

The fact the a BTC is digital and therefore borderless has appeal for many different types of people. There were many rumours through 2012 and 2013 that wealthy Chinese businessmen and families were using alt coins and BTC especially as a way to move money and wealth out of China. In early 2014, the Chinese government announced that it was now illegal to use the currency, suggesting that those earlier rumours were true. The fact that wealthy Chinese were using it as a means of moving money does not mean that they were money laundering or committing other crimes, but the reality is that it is very possible that they were.

In mid 2014, details emerged about a project soon to launch called Dark Wallet5 where the stated goal is to help enable money laundering! As the Wired article linked to above notes, this does have the potential to fix one of the privacy problems associated with Bitcoin – every transaction is visible within the blockchain. As governments around the world struggle to decide how to regulate the alt coin space, it seems inevitable that more solutions to thwart those regulations will be developed and typically, these projects will evolve much faster than the legislation.

Subject To Global Crime?

However, crime strikes in many ways and Bitcoin has enabled more than users to commit crimes. Bitcoin hacking has been a real problem for users and companies around the world.

There have been a number of smaller “bank robberies” but the problems encountered at Mt Gox, formerly the largest Bitcoin exchange, shows just what the risks can be.

Many people that own BTC have simply left their wallet in the hands of the exchange through which they purchased the coins. In many ways this seems logical. We have all been conditioned to believe that banks are more secure and that is where you keep money. Unfortunately, it has been proved on many exchanges that they are subject to hacking.

An individual is much less likely to suffer from hacking since they hold less money generally and they are virtually anonymous. In contrast, the exchanges hold lots of wealth and everyone knows who and where they are. Therefore, when it comes to hacking, wallets are probably safer stored personally or on an encrypted cloud storage provider.

One problem is the nature of digital currency – you can’t see an attack coming and it could be coming from anywhere. This is the same risk faced by all the alt coins – any hacker based in any other country could be trying to enter the system or your wallet to transfer your money away.

A great example of this happened in May 2014 when a substantial theft of Dogecoin was announced6. While the value of one Doge is much less than one BTC, it is still real value being taken from someone. The motto, if there is one, is that it is vital to investigate the security of even the biggest wallets and exchanges and if possible, download your coins onto your own secure location.

After all that bad news, how about something much cooler…? In mid 2014 a news story broke about a 15 year old that was given $1,000, invested in BTC, sold at $100,000 and launched his own company! If this7 doesn’t tell you that we live in a brave new world with lots of benefits, nothing will.