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What_are_Litecoins
What_are_Litecoins

What is Litecoin and How it Works (All You Need to Know)

Litecoin – Introduction

Litecoin (LTC) is an open source peer-to-peer cryptocurrency that is decentralized. It is generally based on principles similar to Bitcoin. It can be regarded as a better version of Bitcoin. Using this digital currency, transactions can be made to any part of the world, within split seconds, and since it is decentralized, no third party, such as a bank is needed. Think of the Litecoin currency as an easier method of transferring money, too and from any part of the world at lower rates.

Here, you would learn the difference between LTC and the other altcoins, as I would present a comparison between them in order for you to appreciate what this simple but unique coin is.

History of Litecoin

At the beginning, Litecoin was created through an open source client on GitHub, by Charlie Lee. He was a software engineer at Google; he worked on YouTube, Chrome and Play Games. He was unsatisfied with the cryptocurrencies at that time, which he thought offered nothing much more than Bitcoin. Therefore he created Litecoin in 2011. The coin was created with a script proof of work function to make mining fairly distributed. Lee claimed that if the currency should reach its peak, Bitcoin must be adopted massively; therefore he spent much of his time working on Bitcoin projects.

The time of the boom of this cryptocurrency was November 2013 which was when it reached a market capitalization of $1billion. In just one day, the price doubled from $19 to $38. It was also in May 2017 that it was the first among the top 5 altcoins to adopt segregated witness. Currently (at the time of publication), the currency is rated at number 6, with a market capitalization of over $5.3 billion.

How to obtain Litecoin

It can be obtained through one of two ways: mining and through an Exchange.

Litecoin Mining

Just like all other cryptocurrencies, Litecoin can be generated by mining. Being a decentralized currency, anyone can be a part of this activity, and there is a reward for it.  The miners are responsible for the issuing of this currency, which has a maximum supply of 84 million coins, unlike the Bitcoin which has 21 million. This fixed supply gives price stability.

Related: WHAT IS CRYPTOCURRENCY MINING? (A BEGINNER’S GUIDE )

The process of mining LTC requires special mining software and hardware, but the very first thing necessary for you to mine this coin is a wallet, where all the mined coins will be held. The hardware for mining LTC is more difficult and expensive to develop, than those of Bitcoin, due to the use of its script algorithm. The mining hardware serves to generate hash power which carries out the actual mining of the coins, while the mining software regulates and monitors the whole mining process, and connects the mined coins to the blockchain.

It is better to mine it through a mining pool, rather than alone, because of its mining difficulty. Whatever a mining pool mines are added to the currency blockchain, and the mined coins are called a block.

To mine a block, the miners must solve complex math equations, and while Bitcoin block time is 10 minutes, that of Litecoin is 2.5 minutes. The reward for mining new block halves every 840,000 blocks, which is in about 4 years, this gets more difficult as more blocks are mined. The reward for mining was initially 50 LTC, but by August 25, 2015, the first having occurred. Hence the reward for mining a block is currently 25 LTC, and by 2019, this reward will be halved again to 12.5, which is the current mining reward for Bitcoin. If mining this coin will not be profitable, just buy them through an exchange.

Also Read HOW TO MINE LITECOIN, LITECOIN MINING – BEGINNER’S GUIDE

Litecoin Exchange

When you get a wallet, you can choose any secure exchanger to buy this currency. Some wallets, like Jaxx, can also exchange other cryptocurrency altcoins like Bitcoin, Dashcoin, Ethereum, directly.

There are different exchangers, who offer different rates for the purchase of this coin and there are so many sites that sell them, because of the increased popularity of this cryptocurrency.

Related: 10 BEST LITECOIN MINING POOLS (PRICE/FEE/SERVER-COMPARED)

Transactions with Litecoin

A transaction with the currency is simply the transfer from one wallet to another. This is where the uniqueness of this coin is shown; it can be sent approximately 4 times faster than Bitcoin, with almost zero transaction fees. In fact, ripple (XRP) is the only altcoin, which can compete with it in this aspect.

Every transaction is added to the blockchain which is able to be accessed by every user or miner node (computer); therefore, its transactions are dependent on two people:

  • Users
  • Miners

Miners not only mine blocks but just as in the Bitcoin system, they also verify and confirm all transactions on the blockchain. The used nodes are what create the difficult puzzles, which the miner nodes must solve before blocks are mined and added to the blockchain. If the miner nodes solve them too fast, the user nodes make the puzzles more difficult, and if they solve them too slowly, the user nodes make the equations easier. This is called proof of work, and it makes the blockchain secure. The LTC blockchain contains all the transactions that have ever occurred, and it is publicly displayed for every node to view.

What_are_Litecoins
What_are_Litecoins

Investments Aspects in Litecoin – Expert’s Opinion

It is an alternative to Bitcoin, so why use them? Well, first of all, they are just about the fastest way to transfer money and are extremely cheap to use. For speculators, this coin is still cheap and seeing the way Bitcoin, Bitcoin cash and Ethereum have appreciated in value, it is easy to know that the currency will soon follow suit. Buying in large numbers for speculative purposes will be very rewarding. Also, for miners, this coin offers the higher reward, when profits are considered.

Also read CAN LITECOIN BE THE NEXT BITCOIN

About Tayyab M

I love to talk about global tech-happenings, startups, industry, education and economy.

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