The Litecoin (LTC) cryptocurrency was developed by Charlie Lee, a former Google employee. It was one of the first “altcoins”—alternatives to bitcoin—to be introduced in 2013. Aside from sharing specific characteristics with Bitcoin, Litecoin was meant to outperform it in terms of transaction speed. Litecoin is based on the original Bitcoin source code.
When it first came out, many people were excited about the potential of Litecoin, but like with many other cryptocurrencies, its price has gone up and down over time (or even certain stocks and bonds). Litecoin was valued at $195.13 as of October 25, 2021, with a market capitalisation of $13.42 billion at the time.
Here, you’ll learn all you need to know about Litecoin, including how the currency works, what Litecoin is used for, and if it makes financial sense to trade it. With this in mind, it is best to invest in Litecoin and to engage in crypto transactions that employ faster and safer processes through online crypto platforms that connect to verified brokers such as https://bitcoinmotion.tech/ .
What Is Litecoin?
Forked from the Bitcoin blockchain (the transparent digital public record used by most cryptocurrencies), Litecoin is a decentralised, peer-to-peer cryptocurrency. According to the currency’s design, people and organisations throughout the globe may swap Litecoins extremely instantly, at nearly no cost.
Litecoin, like Bitcoin, verifies transactions on the blockchain using a proof-of-work (PoW) algorithm, although it is considered a “lighter,” speedier version of Bitcoin due to several improvements. Because Litecoin employs the scrypt mining method, it can process transactions more quickly than Bitcoin. Fast-paced transactions are a must for traders looking for convenience in their journey. Blockchain transactions often have a tedious verification process. Litecoin makes it easier to have these transactions.
About four times quicker than Bitcoin, the Litecoin network creates a new block every 2.5 minutes. There are four times as many Litecoins in circulation. Litecoin’s total supply is capped at 84 million coins, compared to Bitcoin’s 21 million.
The Litecoin supply is limited to 84 million, unlike typical fiat currencies like the dollar or the euro. About 67 million Litecoins were mined in late October 2021.
How does it work?
Similar to Bitcoin and other blockchain-based cryptocurrencies, Litecoin mining requires the use of specialised equipment. It takes billions of computations to verify each transaction in a block and secure it on the blockchain, which is done by miners using high-powered computer gear. As a result, “proof of work” is an often-used word.
A block is added to the chain after it has been confirmed. Because each user has a public address, transactions utilising blockchain technology are thought to be anonymous (even if, in reality, they are pseudonymous). The payout for successfully verifying a block is 12.5 Litecoins for miners. The amount of Litecoins given out is half on a regular basis, much like bitcoin.
To celebrate the debut of Litecoin in 2011, a prize of 50 LTC was offered. In August of 2015, the LTC price was cut in half to 25 LTC. Rewards were cut from 25 to 12.5, and the reduction will continue at regular intervals—every 840,000 blocks—until they reach an all-time high of 84,000,000 LTC, which will occur in August 2019.
Litecoin blocks are mined every 2.5 minutes, which means the halving happens about every four years. The Litecoin algorithm has a built-in rhythm.
Is it different from Bitcoin?
It is the fundamental goal of Litecoin to serve as a payment medium that does not need the involvement of a bank or any other third party in order to facilitate transactions.
For regular usage, Litecoin was meant to be cheaper and more efficient. Bitcoin, on the other hand, is typically utilised as a long-term store of wealth.
Miners must solve hash functions in order to add new Litecoin or bitcoin blocks to the network. The encryption techniques used by Litecoin and Bitcoin vary significantly. In contrast to Bitcoin, which employs SHA-256, Litecoin utilises scrypt, which is a newer algorithm.
So that GPU and CPU-based miners could compete with ASIC-based miners, Litecoin’s inventors picked scrypt from the beginning. Even said, ASIC-based miners have been improving over time in their ability to mine scrypt and often produce more hashes. Scrypt was also thought to be more resistant to cyberattacks than other cyphers.
Litecoin’s founder, Charlie Lee, emphasised transaction speed as a top priority, and this is one of the primary reasons for LTC’s widespread acceptance. The average confirmation time for a transaction on the Bitcoin network is around 10 minutes, but Litecoin’s is about 2.5 minutes. Due to its reduced block generation time, the Litecoin network is capable of handling more transactions.
The market capitalisation of Bitcoin is much bigger than that of Litecoin since Bitcoin is the most popular cryptocurrency. All bitcoins in circulation were worth over $1.1 trillion as of October 25, 2021, while Litecoin’s market capitalisation was around $13.42 billion.
Bottomline
Litecoin’s 10-year history is intriguing. Since its inception, Bitcoin Cash has become one of the most popular altcoins, trading with the likes of Ethereum and Litecoin among the top 20 cryptocurrencies. Litecoin’s transaction time is 2.5 minutes, compared to bitcoin’s 9 minutes, thanks to the adoption of scrypt, a quicker algorithm.
Even a decade after its inception, Litecoin is still highly regarded for its lightning-fast transaction times, despite some recent setbacks. Currently, these concerns include possible regulatory issues and a possible loss of investor popularity. However, it’s impossible to predict what the future holds. Investors who have a front-row seat will have a better view of how the future plays out. Always study the volatility of the market if you want to explore more about cryptocurrencies.
