The cryptocurrency market has been reasonably positive during trade on Wednesday with nine out of the ten largest cryptocurrencies posting gains over the last 24 hours according to Coin Market Cap.
The best performer by a significant margin has been the Litecoin (LTC) price. At the time of writing Litecoin is fetching US$180.98 per coin, up 14% since this time yesterday.
This has increased its market capitalisation to US$10 billion, making it the fifth-largest cryptocurrency in the world after overtaking Cardano (ADA).
Why is Litecoin on fire?
This gain appears to be related to an announcement revealing plans for Litecoin to follow in the footsteps of bitcoin (BTC) and have its own hard fork next week.
Last year bitcoin had two hard forks, resulting in Bitcoin Cash (BCH) and Bitcoin Gold (BTG).
Litecoin has followed the same formula, advising that Litecoin Cash will launch on Monday of next week.
According to a press release from the Litecoin Cash Foundation, existing holders of Litecoin will receive 10 Litecoin Cash tokens for every Litecoin they own.
Why will Litecoin fork?
The release explains that Litecoin Cash has significant advantages compared to Bitcoin and Bitcoin Cash. While those currencies both have a 10-minute block time, Litecoin Cash's 2.5-minute block target allows much faster transaction confirmation.
Furthermore, compared to the original Litecoin, the new fork features superior mining difficulty retargeting through the DarkGravity algorithm used by Dash. Transaction fees are also reduced by 90% to provide incentive for real-world use.
Should you buy Litecoin?
While this fork may be a promising development for the cryptocurrency and make it more appealing for businesses to use the technology, I wouldn't be in a rush to invest in Litecoin just yet.
I think that cryptocurrencies are exciting technological developments, but valuing their worth is near impossible at this stage. So for now, I intend to continue watching on from the safety of the sidelines instead of risking any hard-earned money in them.
