Recently I was talking to the lookintolitecoin.com writer's guild and explaining how Litecoin and Dogecoin are stronger together with merge mining. I was told to definitely write an article about it. I was excited about this, but what's the hook? I was brainstorming with the idea about how Elon Musk is a secret Litecoin Lover and expresses it by pumping Doge. Elon is a very smart guy, so I'm pretty confident he understands the superiority of Litecoin against all others and also the relationship between Litecoin and Doge with merge mining. Then just like that, the universe provides with a quote from a recent Roger Ver interview with Bloomberg.
To understand what I'm talking about, let's first talk a little about the economics of Bitcoin mining. Mining costs fiat, the purchase of equipment, cost of electricity, and labor to maintain and keep the miners running. To maintain these costs, miners have to sell their Bitcoin profits from block rewards and transaction fees. When the price of Bitcoin is going up, profitability goes up and miners are able to hodl more Bitcoin. This supports price as miners sell less Bitcoin. When the price goes down, however, miners have to sell more, if not all, of their Bitcoin rewards to stay in the game. This is one of the reasons for volatility in the Bitcoin price; miners pump rising price on the way up and dump lowering prices on the way down. Overall this relationship with miners and price is good for the Bitcoin network's ecosystem as miners are forced to increase efficiency making the network more robust for the next market cycle.
These economic forces of mining are well known by Charlie Lee, creator of Litecoin, who decided to save the dying memecoin, Doge. His idea was to merge mine Litecoin and Dogecoin together, thus saving Doge from the dustbin of history like so many other blockchains of that time, circa August 2014. Merge mining is when miners mine both coins at the same time without any extra work. The benefit to miners is that they earn rewards and transaction fee on both networks. The immediate benefit to Doge was improved security, allowing it to last all these years. A great, more detailed article about merge mining security can be found here:
One of the biggest concerns by the Doge community was the question, "Why would Charlie Lee help Doge?" The obvious answer is because it helps Litecoin too! But how? It comes back to mining economics. Litecoin miners can now support overhead with both LTC & Doge! When the market is going up, miners make profits on both coins and so they sell less of both coins on the way up. When the market is going down, miners don't need to sell as much, supporting price. It's a win/win scenario for both coins! (Another reason why Bitcoin Maximalism is poison to the Bitcoin network)
Rover Ver's new accident
Curiously enough, Roger Ver stated, "If I had to pick three contenders for the world's dominant cryptocurrency, they would be Doge, Litecoin, and Bitcoin Cash." Does he know that Litecoin and Doge are stronger together and are united? I think Elon Musk knows. I think Elon bought Litecoin then pumped Doge. Could he be one of these big whales?
The one thing I do know is that Litecoin is overlooked by many, but probably not by smart money. The fundamentals and innovation positions Litecoin as the #1 contender for the world's dominant cryptocurrency. Isn't it time you "Looked into Litecoin"?
Follow me on Twitter: The Litecoin Eagle @EagleESBD
For more about the strengths of Bitcoin, Litecoin and Dogecoin as currencies, please read my other article