This article covers the following:
- What is Litecoin?
- Association to Bitcoin
- What's the difference between Bitcoin and Litecoin?
- What’s in store for Litecoin?
Launched in 2011, Litecoin (LTC) was created by Charlie Lee and is considered as one of the earliest alternative coins (altcoins) based on the model of Bitcoin (BTC).
LTC describes itself as "A peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world." -- a vision that is similar to BTC’s.
It functions like an online payment system (think PayPal) or any online banking system, where users can transfer currency to one another. However, instead of using traditional currency LTC conducts transactions in units of Litecoin.
Unlike the majority of altcoins, LTC was created with the intention of being a complement to BTC. This is why LTC is also known as “silver crypto” while BTC is gold.
You are probably wondering if this article is about Bitcoin just by the sheer number of times “BTC” was mentioned.
However, to truly understand Bitcoin it is almost necessary to make comparisons with Bitcoin. Litecoin, by their own admission, is a clone of Bitcoin.
If you want to read about Bitcoin first, kindly refer to this page.
Litecoin was first supported on Coinhako in 2018, and our users can buy LTC with fiat currencies available in their account or with other cryptocurrencies that are supported in their country of residence.
While LTC is similar to BTC in terms of purpose and technology, it does differ in certain aspects. So, what are some of the fundamental differences that set it apart from bitcoin?
Mining, to keep it simple, is a competition between computing power that is used to solve extremely hard cryptographic puzzles in order to get tokens as rewards.
While both use mining as proof-of-work — which is a term to encapsulate the idea that a significant amount of effort is needed to prove non-malicious intent— they differ in the algorithm used.
Bitcoin uses the SHA-256 algorithm, which requires a lot of processing power and proper hardware. Meanwhile, LTC uses the Scrypt algorithm which allows mining to be executed using a Mac or Windows — making it more accessible for users to participate in.
Ideally, the average block mining speed of Litecoin is 2.5 mins whereas compared to bitcoin’s 10 mins, is four times faster. Although, due to network congestion these transaction times can fluctuate.
Firstly, this aids merchants who engage in smaller transactions daily.
Another advantage is the variance in miner rewards. Since the transaction times are small, there are higher chances for more people to mine the blocks and earn the LTC reward, promoting a more decentralized system.
However, there is also a downside to this faster transaction speed, such as the formation of more orphaned blocks. These are blocks that are relegated in instances where more than one miner comes up with a block to be added to the chain.
The total supply of LTC is 4 times larger than BTC, with a maximum supply of 84 million LTC. Currently, there are only 65 million LTC in circulation.
LTC has consistently ranked in the top 10 most popular cryptocurrencies for many years now. Despite turbulence faced in 2019, its similarities to Bitcoin has allowed Litecoin to sustain its position as one of the main platforms to test out Bitcoin’s blockchain update in the eyes of cryptocurrency enthusiasts. With a team of prominent developers behind Litecoin and a strong value proposition for the future of transacting, what will the future hold for Litecoin?
You can view Litecoin's Presentation to learn more about the digital currency
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All opinions expressed here by Coinhako.com are intended for educational purposes, taken from the research and experiences of the writers of the platform, and should not be taken as investment or financial advice.