Like Bitcoin (BTC), Litecoin is based on an open-source, decentralized blockchain. More information may be found in the following article.
Litecoin (LTC) is commonly regarded as the first cryptocurrency that competed with Bitcoin. The launched it on October 13, 2011 as “the silver to Bitcoin’s gold”. Since then, it has been a popular digital currency. It remains one of the most valuable cryptocurrencies today in terms of market value.
To guarantee that no new transactions contradict the blockchain history, a Litecoin operator keeps copies of each blockchain. Miners play an important role in ensuring that newly minted blocks include recent transactions. This is so that new deals do not reject the blockchain history.
There are certain key distinctions between Bitcoin and Litecoin that they must be addressed. Transactions are faster on Litecoin, and the cryptocurrency has a higher supply than Bitcoin. To make mining fair for everyone, the LTC protocol hashes blocks using a separate method. These basic distinctions are said to have helped LTC become one of the most popular cryptocurrencies throughout time.
How Does it Work?
Litecoin has several characteristics with Bitcoin, the most prominent cryptocurrency by market capitalization. Even though they have many qualities in common, these cryptocurrencies are not the same.
The developers of Litecoin blockchain built it using open-source code as well. It employs a proof-of-work consensus process, which allows users to devote computational power to block verification in exchange for Litecoins.
Despite the fact that the consensus process remains the same, the algorithms for the validation blocks change dramatically. Bitcoin employs the Secure Hash Algorithm (SHA), but Litecoin employs the Scrypt consensus algorithm, which is exceptionally secure.
Litecoin varies from Bitcoin in two key ways: the pace in the formation of new blocks, and the algorithm it uses. In comparison to Bitcoin, Litecoin has solved four times as many blocks, and its supply has been quadrupled to 84,000,000, nearly four times Bitcoin’s.
Charlie Lee, a Massachusetts Institute of Technology alumnus, has been the creator of Litecoin since 2008. Justin Lee, the inventor of Litecoin, was a former Google engineer who fell in love with Bitcoin in 2011 and went on to work for Coinbase as the exchange’s head of engineering in 2013.
In the years after his entrance at the crypto exchange, Lee was virtually completely unable to work on Litecoin. He claimed at the time that he believed it was critical for individuals to protect Bitcoin ownership, so they could hang on to it because Litecoin was “not ready” to develop at the time.
In late 2017, Lee departed the firm to focus solely on the development of LTC. He is now the managing director of the Litecoin Foundation, a non-profit organization dedicated to the cryptocurrency Litecoin.
Since he was frequently accused of manipulating the cryptocurrency for personal benefit, he announced in December 2017 that all of his LTC will be sold and given. Litecoin was trading at an all-time high of roughly $350 when Lee made his move, and the general public slammed him.
How safe is Litecoin?
One of the most important action metrics is the network of miners that Litecoin utilizes to safeguard its network. Because it is a decentralized coin, anybody may participate in the block validation process.
When considering the probability of security breaches, many individuals consider 51 percent of all assaults. The creators of Litecoin are well-known for not making compromises when it comes to security problems, and they take them extremely seriously. Because of its huge, decentralized network of participants, as well as the efforts of its creators, they expect LTC to stay impervious to these sorts of hostile network attacks.
Proof-of-work and Proof-of-Stake are two different types of consensus procedures. The most significant contrasts between these two is the location of their mining process. It’s not difficult to figure out how to make a work proof.
Miners are the people who use their computers to solve difficult cryptographic challenges and create coins.
If the riddle is simple to solve, miners will continue to mine blocks and consume the whole bitcoin supply. If the challenge is difficult to solve, miners will stop mining blocks and consume the entire bitcoin supply.
While the element of the problem that entails solving it might be difficult, verifying that the answer is right should not be.
Investors may store Litecoin in a number of wallets. It is up to the user to select the wallet that best suits their needs in terms of security, functionality, and so on. The Kriptomat exchange is a fantastic place to save your LTC. It provides a wide range of features (including purchasing, selling, and exchanging for other cryptocurrencies) without jeopardizing your security.
What Drives Litecoin’s Value?
There is a finite supply of Litecoin since they restricted its supply to 84 million units. During Bitcoin’s halving occurrences, block rewards for miners in Litecoin lowered. Similar to Bitcoin or Ethereum, it effectively lowers the quantity of coins they have added to marketplaces.
Because Litecoin has a restricted and predictable supply, they considere it a scarce asset with a significant amount of value (partly) generated from its scarcity.
The other sides of the equation that give Litecoin its value are its usability and its value, in addition to its usability and the scale of its network (both in terms of miners as well as buyers and sellers).
Uses of Litecoin
Critics have chastised Litecoin throughout time for struggling to define a value proposition that set it apart from the initial alternative cryptocurrencies. Its popularity has risen as a result of its limited supply and marketing as a “silver to Bitcoin’s gold” to entice consumers.
A method called the halving mechanism control the inflation of Litecoin. Since its inception in 2011, this blockchain has shown to be safe enough to withstand 51 percent assaults. A mining company or entity obtains over 51% of the computer power required to secure the blockchain and modify its history.
Its dependability is one of the most important advantages it has. In this respect, Bitcoin is the “silver” of the cryptocurrency world. It is a trustworthy digital currency, that they can be used to execute transactions at a reasonable cost since they have not abused it.
The Popularity of Litecoin
The cryptocurrency has become popular among investors and traders as a consequence of its restricted supply and issuance reductions, who are betting on its future price based on the limited supply and issuance reductions. It is advantageous to include LTC in a portfolio to retain exposure to the crypto market since it is dependable and provides investors with exposure to its movements without the risk of unanticipated tragedy.
Transferring funds around on the Litecoin network is significantly inexpensive than on networks with higher transaction fees, Litecoin’s secure network makes anonymity much easier. Most cryptocurrency payment processors accept it because people also use it as a payment mechanism.
The CME Group is the most well-known bitcoin exchange. CME Group supplies Litecoin to crypto exchanges such as TradeKing.
The low cost of transactions across its network. Some even use it to move cash between exchanges, lending platforms, and other networks, as well as transactions on high-fee networks like Bitcoin and Ethereum.
Every day, the Litecoin network processes around 100,000 transactions. Also, there are often between 200,000 and 300,000 active addresses on the web. Despite the fact that it is not as well-known as the Bitcoin network, its utility is apparent.
Litecoin allows smaller payments and is quicker than Bitcoin at processing big transactions. Charlie Lee and his team of engineeres have accomplished some of the most important cryptographic breakthroughs.
Litecoin, without a doubt, has the most potential of all the cryptocurrencies now accessible. It is already demonstrating a real-world use case, something most projects can only hope for.