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It's going to be interesting. There's inherently no technical difference between LTC and BTC (block intervals are not drastically different in practice, and nom

It's going to be interesting. There's inherently no technical difference between LTC and BTC (block intervals are not drastically different in practice, and nominal count of coins is meaningless). Network effect-wise, Bitcoin has much more hashing power (and thus resistance to 51% attack) than Litecoin, but it is also more valuable one, so it also does not matter much. I don't buy there's any "diversification" in holding both LTC and BTC. The technical and legal risks are mostly the same. To me, in the long run, it's more profitable to put 100% of your money in the most liquid of them, which is currently Bitcoin. Simply because people want one money: one most marketable, most widely accepted asset. LTC is still valuable because we are in a very early speculation phase and most folks got used to presence of both gold and silver, and there's very strong incentive for recent Bitcoin miners with video cards to pump up LTC (as that's the only thing to mine on their equipment right now) and sell out for Bitcoin while they can. Either Bitcoin or Litecoin must pop, there's no economic reason for them to stay in some balanced relation. I bet even gold will largely lose wealth as it's moved to Bitcoin, but then gold has very different risks and features, so it may find its balance with Bitcoin.

neomindryan 13y ago
> there's no economic reason for them to stay in some balanced relation. Actually, there might be. The fee needed to get a bitcoin transaction into the blockchain is determined by a market, and it is a flat number, not a percentage of the transaction. If bitcoin succeeds, it may not be practical to use it for smaller transactions.
- oleganza 13y ago
  It's neither a flat number, nor a percentage. Fee is not hard-coded in the protocol, everyone can decide on the fee himself. Users decide how much they want to pay and miners decide how to prioritise transactions. The fee is freely floating in both LTC and BTC, no difference here. The only practical difference is liquidity and it is produced only by network effect which tends to create "one of a kind" winner in a competition between very similar networks.
  - neomindryan 13y ago
    If the maximum block size limit ever constrains the volume of transactions, what will happen to the fee people decide to pay?
    - oleganza 13y ago
      Block size limit will be raised as soon as there's a pressure of transactions. Miners are not interested in devaluing their savings because Bitcoin is too expensive to use for newcomers. http://blog.oleganza.com/post/43849158813/this-is-how-block-size-limit-will-be-raised http://blog.oleganza.com/post/43849158813/this-is-how-block-...

neomindryan 13y ago

> there's no economic reason for them to stay in some balanced relation. Actually, there might be. The fee needed to get a bitcoin transaction into the blockchain is determined by a market, and it is a flat number, not a percentage of the transaction. If bitcoin succeeds, it may not be practical to use it for smaller transactions.

oleganza 13y ago
It's neither a flat number, nor a percentage. Fee is not hard-coded in the protocol, everyone can decide on the fee himself. Users decide how much they want to pay and miners decide how to prioritise transactions. The fee is freely floating in both LTC and BTC, no difference here. The only practical difference is liquidity and it is produced only by network effect which tends to create "one of a kind" winner in a competition between very similar networks.
- neomindryan 13y ago
  If the maximum block size limit ever constrains the volume of transactions, what will happen to the fee people decide to pay?
  - oleganza 13y ago
    Block size limit will be raised as soon as there's a pressure of transactions. Miners are not interested in devaluing their savings because Bitcoin is too expensive to use for newcomers. http://blog.oleganza.com/post/43849158813/this-is-how-block-size-limit-will-be-raised http://blog.oleganza.com/post/43849158813/this-is-how-block-...