But Bitcoin is not the only such magical make-believe money. Another virtual currency, Litecoin (LTC), is set to push our economy slightly further along the way to a place where non-state currencies are common.

“The development team doesn’t see LTC as a competing currency to BTC,” Litecoin’s Anton Yemelyanov told the Daily Dot. “There is no association between these cryptocurrencies (other than Litecoin stems from Bitcoin).”

Well, OK.

What makes LTC interesting in the near term is Mt. Gox’s plans to begin trading the currency alongside Bitcoin. Mt. Gox is responsible for 80 percent of the worldwide exchange of Bitcoin, so its adoption of Litecoin shines a light on the currency.

Mt. Gox has been pummeled by repeated distributed denial of service attacks (DDoS) and has pushed back plans to open LTC trading, but it has stated its interest and intention clearly.

“We were planning on (introducing Litecoin to the exchange) two weeks ago,” Mt. Gox said in an April 24th press release (PDF), “but events derailed that plan. Right now we are focused on overall stability of the exchange, and will launch LTC when we are ready. Otherwise we could be further complicating things.”

Litecoin is already traded on two smaller exchanges, BTC-E and Vircurex. A single Litecoin is currently valued at around $2.80.

One of the big complaints during the panic sell-off of Bitcoin several weeks ago was that Mt. Gox, BitInstant and others were taking a long time verifying transactions. So the idea of greater speed, a claim LTC makes regarding its currency’s transactions, may prove attractive.

“Usually the most favorable aspect of Litecoin as seen by users,” said Yemelyanov, “is its transaction confirmation time, which is 2.5 minutes instead of 10. Litecoin opponents will quickly argue that it is not as secure as Bitcoin’s confirmation (this can be argued both ways), but people don’t care when they transfer (low dollar) payments.”