Last year bitcoin (BTC) went through two so-called hard forks that resulted in the emergence of Bitcoin Cash (BCH) and Bitcoin Gold (BTG).
A hard fork occurs when a single cryptocurrency splits in two, usually as a result of the cryptocurrency’s existing code being changed, resulting in both an old and new version.
While Bitcoin Gold didn’t quite capture the imagination of cryptocurrency traders, Bitcoin Cash certainly did and it has since become the fourth-largest cryptocurrency by market capitalisation.
But bitcoin isn’t the only cryptocurrency that has been the subject of a hard fork.
Overnight the popular altcoin Litecoin (LTC) had a hard fork of its own, resulting in the launch of Litecoin Cash (LCC). Owners of Litecoin at the time of the fork received 10 Litecoin Cash tokens for every LTC they owned.
Litecoin Cash is an upgraded version of Litecoin with quicker processing times and lower transaction costs. It has been designed to increase the appeal of Litecoin for real world use.
So far the response to its launch has been incredibly positive. According to Coin Codex, the Litecoin Cash price is currently US$7.13. Although it is hard to pinpoint the exact price at which it launched, it is believed to have been approximately US$1.40. Which means that LCC is up a massive 409% on day one.
That’s the million dollar question. The reception has been extremely positive for Litecoin Cash and I can imagine traders bidding it higher for some time to come. However, whether it gains traction in the real world only time will tell.
I think that bitcoin (once it goes through its planned upgrade) and Ripple (XRP) are the more likely cryptocurrencies to break into the mainstream. But even if that happens, it will still be incredibly difficult to value them.
In light of this, I think investors ought to continue to remain cautious and consider watching on from the safety of the sidelines.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.