Although you don’t often see Litecoin (LTC) in titles like Bitcoin (BTC), it is still one of the most popular cryptocurrencies. It is also the oldest crypto after bitcoin.
As its name implies, Litecoin was originally created to improve perceived bugs in Bitcoin, such as slow transaction processing speeds and mining monopolies. LTC is designed for use in day-to-day transactions, where Bitcoin has evolved into a “value store”.
What Is Litecoin :
Created by former Google engineer Charlie Lee, Litecoin was one of the first “altcoins” – a name given to cryptocurrencies other than Bitcoin (and sometimes Ethereum).
“Litecoin is the second-oldest cryptocurrency, created from the Bitcoin protocol in 2011,” said Jay Blasky, digital currency expert at BTIRA. “It was engineered to be used for fast, secure and low cost payments.” Think of it as a bitcoin spinoff.
The goal of launching Litecoin was to improve Bitcoin in several different ways. For one, Lee has developed a new hashing algorithm for Litecoin called Scrypt (pronounced S-crypt). The simple algorithm supports Litecoin’s fast transaction speed. Bitcoin has a slow transaction processing speed of about five transactions per second. It can take up to 10 minutes to create new blocks in the Bitcoin blockchain.
The slow pace of transactions frustrates traders who want to accept Bitcoin as payment. You can wait an average of one hour for the six confirmations required for a bitcoin transaction. Imagine buying something online using a credit card and being on that “your transaction process” screen for a whole hour.
On the other hand, Litecoin’s transaction processing speed is 54 প্রতি per second, and new blocks can be created every 2.5 minutes in the Litecoin blockchain. Although Litecoin still requires a minimum of six confirmations from most exchanges to be considered unchangeable, peer-to-peer (P2P) crypto payment networks can often handle Litecoin transactions almost instantly.
Improved transaction speed to prove to traders that they no longer have to be frustrated during the long settlement of Bitcoin. Instead, they can accept Litecoin and settle faster payments and, therefore, conduct business faster and faster on par with other digital payment methods.
How Does Litecoin Work?
Litecoin shares several similarities with Bitcoin. Both are open source projects that use proof of work to verify transactions.
But Litecoin also has some significant differences from Bitcoin. In addition to processing speed, there are supply issues. While Bitcoin is limited to a maximum of 21 million coins, Litecoin is limited to 84 million coins.
How Litecoin is mined :
Litecoin miners solve complex mathematical problems called hashes to gain the right to record new transactions on the blockchain.
Once the block is closed, the blockchain cannot be changed. The mine receives 12.5 LTC as a reward for being the first miner to correct the hash associated with the transaction through proof of work consent process.
Litecoin mining activity is not something you would normally see running on a computer outside someone’s living room. Resolving hashes requires a lot of computing power, which requires significant power and space.
In fact, the lion’s share of Litecoin mining is performed by mining farms and pools of crypto miners using sophisticated hardware.
How Litecoin is half
To help control Litecoin’s supply, Litecoin halves just like Bitcoin.
Litecoin’s supply is limited to 84 million coins. Yet when miners add a new block to Litecoin’s blockchain, they are rewarded with newly generated LTC. This could increase the supply of Litecoin indefinitely if it is not to be halved.
By halving, the minor rewards for successfully recording new blocks in the Litecoin blockchain are reduced (halved) at regular intervals. In the case of Litecoin, this is 840,000 transactions per. So when Litecoin was first launched, the minor reward for adding a new block to Litecoin’s blockchain was 50 LTC. Over the past few years, that award has halved to 12.5 LTC as a block award.
The next LTC half is expected to take place in 2023.
How Is Litecoin Used?
Litecoin is extremely liquid, which makes it a crypto for easy trading. In fact, Litecoin holders will find that merchants like Newegg, SlingTV, and even nonprofits like the American Red Cross are happy to accept their cryptocurrency.
You can also use digital currency apps like BitPay or CryptoPay to pay using LTC. If you want to use LTC for P2P payments, you can use the Binance app to pay anyone with LTC.
Litecoin Advantages :
By the way, Litecoin is a faster cryptocurrency than Bitcoin, and it makes it even cheaper, without adding any additional technology to the top of the blockchain.
At the time of writing, Bitcoin’s transaction fees were significantly higher, averaging about 3.92%, compared to Litecoin’s transaction fees of about 0.06%.
Litecoin Disadvantages :
In 2017, Litecoin creator Charles Lee distanced himself from most of his Litecoin holdings, citing a “conflict of interest” and Lee’s move caused some damage to trust in crypto.
“What caught the eye of investors and affected investor confidence was that in 2017, Litecoin founder Charles Lee sold his stake in Litecoin,” said Cloudia Minia, CEO and co-founder of blockchain-based SeedOn’s crowdfunding platform.
Although designed to get TPS faster than Bitcoin, Carlos Gonzalez Campo, a research analyst at 21Shares, says the “Layer-2 solution on Bitcoin like Lightning Network” has both accelerated Bitcoin transactions and potentially reduced the need to use Litecoin. As a fast payment network.
There are more new cryptocurrencies with faster TPS speeds. These include EOS at 4,000 TPS, XRP at 1,500 TPS and Cardano at 257 TPS, just to name a few.
Should You Buy Litecoin ?
Although Litecoin is one of the most traded cryptocurrencies, does it make for a good crypto investment?
Blasky of BitIRA says Litecoin may be suitable for a portfolio of experienced cryptocurrency investors who appreciate its sustainable value and flexibility বিশেষ especially those who want “a combination store-of-value asset with the convenience of convenient transactions.”
For some new crypto investors, Litecoin may be a suitable place for a small partnership to get used to the “ins and outs” of crypto trading, some experts say.
Regarding whether LTC is a good choice for your wallet, Minia speculates, “There are other blockchain competitors from which people can choose, however, Litecoin still remains a relevant choice.”
Before you invest in Litecoin, learn how to buy Litecoin and read cryptocurrency wallets. Talk to a financial advisor about how much you can actually invest in cryptocurrency based on your unique financial goals.