Litecoin has outperformed Bitcoin in 2017, demonstrating a staggering 8,000 percent increase in price. While it still remains as the fifth largest cryptocurrency behind Bitcoin Cash and Ripple, it has solidified itself as a leading digital currency.
Since January 1, the price of Litecoin has surged from $3.63 to $302, as its market cap increased from below $177 million to $16.4 billion. The market valuation of Litecoin is currently larger than that of Bitcoin in the beginning of 2017.
Over the past 12 months, the Bitcoin dominance index has decreased from above 80 percent to 56 percent. Several analysts have attributed the decrease in the Bitcoin dominance index to the migration of users from Bitcoin to alternative cryptocurrencies (altcoins) such as Litecoin and Ethereum that have significantly lower transaction fees than Bitcoin.
At the time of reporting, the median transaction fee of Litecoin is around $0.065, while Ethereum’s remain above $0.5. Due the high transaction fees of Bitcoin, many users have started to utilize Litecoin to process cheaper and small transactions.
Bitcoin Fees, a Bitcoin transaction fee prediction platform developed by Earn.com (formerly 21 Inc) show that the fastest and cheapest transaction fee is 430 satoshis per byte, or 97,180 satoshis for median-size transaction. That is, a recommended fee of around $18.
When the size of the Bitcoin mempool is below 50 million bytes or is relatively low, transactions can still be confirmed by miners with lower fees. But, when the size of the Bitcoin mempool is larger than a hundred million bytes, without high fees, it is difficult to have transactions confirmed within 24 hours.
More users have begun to utilize Litecoin and other alternatives like Ethereum to process small transactions with cheaper fees, while relying on Bitcoin as a robust store of value and safe haven asset.
Still, Litecoin creator and former Coinbase director of engineering Charlie Lee emphasized that it could take at least five years for general consumers to utilize Bitcoin and Litecoin in the real world.