What Is Litecoin?
As the world of cryptocurrency grows ever larger with thousands of different crypto coins now available, investors are seeking credible alternatives to Bitcoin and Ethereum. One of the most intriguing options is Litecoin. It was created by a man named Charlie Lee, a former Google employee that sought to develop a ‘lite’ version of Bitcoin.
Why was Litecoin Invented?
Lee believed that Bitcoin had steered away from its original intended purpose to become more of a store of value or, asset for long-term investments. He wanted to create a crypto coin that could truly be used to pay for low-value everyday purchases. The Litecoin Network went live in the autumn of 2011, operating as a fork of the Bitcoin core client.
Another of Lee’s primary goals with Litecoin was to create a cryptocurrency that would minimise the time it takes to confirm new blocks from ten minutes to two-and-a-half minutes, allowing for a greater volume of transactions. Today, every two-and-a-half minutes, a Litecoin block is mined, generating 25 new Litecoin coins. Up to 14,400 new Litecoin coins are in circulation at the end of each day.
How Does Litecoin Work?
It is possible to transfer Litecoins to individuals and organisations by sending them from your e-wallet to the wallet of your recipient. With each transaction, there is a tiny miner’s fee that goes towards regular Litecoin miners that underpin the success and evolution of the Litecoin network.
The mining procedure of Litecoin differs significantly from that of its older brother, Bitcoin. Although both utilise a Proof-of-Work consensus where computational power is needed to resolve difficult cryptographic puzzles, Litecoin goes about its PoW a little differently. While Bitcoin uses the well-known SHA-256 algorithm which requires heaps of processing power, Litecoin has sought to find a workaround to avoid wasting energy by using the Scrypt algorithm. This ‘memory hard problem’ allows average people with CPUs and plenty RAM to solve the same puzzles in a serialised way, without using the same amount of raw processing power as Bitcoin mining requires.
Can Litecoin be used Anonymously?
Litecoin is fashioned after Bitcoin, with the only main difference being its algorithm that caters more to smaller payments. As such, Litecoin can be used to transact anonymously in much the same way; directly on the network. If you wish to exchange you LTC for other crypto and fiat currencies however, you will have to register an account with a third party intermediary. Using a popular exchange or well-established broker will allow all of your transactions to be traceable back to you. Many of these companies are now regulated for your protection and comply with AML and KYC regulation. This means that you will have to provide proof of identity and even verify your personal bank account with them.
Is Litecoin Real Money?
Litecoin can definitely be classified as ‘real money’. It is in fact, a better model for small everyday payments than its parent, Bitcoin. The fact that you can transact on the Litecoin network with a high degree of anonymity, places the token closer to ‘cash’ than credit or debit card payments.
Litecoin Transaction Fees and Charges
After the most recent core update on the Litecoin network, some exceptional upgrades were introduced. These included a new wallet format, improved privacy levels and a significant change to the policy on network fees. These adjustments effectively reduced the minimum transaction costs from 0.001 LTC/kb to 0.0001 LTC/kb. This makes Lightcoin one of the most cost efficient currencies to transact with in financial history.
What Are The Pros And Cons Of Litecoin?
- With its ability to complete digital transactions four times faster than Bitcoin, Litecoin is becoming a popular choice for everyday payments.
- Litecoin mining is more accessible to everyday people thanks to its new Scrypt algorithm.
- Another decentralised cryptocurrency, overseen by the community of coders that maintain the Litecoin Blockchain.
- Operational for more than seven years, which is far longer than many altcoins.
- As a modified version of Bitcoin, Litecoin could face an uncertain future if Bitcoin’s scalability issues are resolved.
- The integration of Segwit in Bitcoin has enabled a greater number of transactions in Bitcoin blocks, already diminishing Litecoin’s benefits.
Learn more about the current price of Litecoin.
Did You Know?
Litecoin has a supply limit of 84 million Litecoins. Once the maximum supply has been met, no other Litecoin blocks can be mined. More than 64 million Litecoins have already been brought into circulation at the time of writing (February , 2020).
Should You Invest In Litecoin?
We’re not here to tell you what you should and should not be investing in. Cryptocurrencies are still a high risk asset but as 2017 showed, sometimes the rewards are exceptional. Litecoin has definitely some positives that Bitcoin does not; mainly the fact that it is better suited to scale, which means that growth is easier. Litecoin has surprised lots of blockchain experts by continuing to position itself in the top 10 cryptocurrencies by market cap, which considering the huge influx of coins since its birth is an incredible feat, there is clearly something to Litecoin that has investors continuing to buy.
Are There Any Similar Crypto Coins?
There are several cryptocurrencies and altcoins like Litecoin you may wish to consider if you opt not to invest in Litecoin as part of your trading portfolio:
As we’ve already discussed, Litecoin is a direct fork from Bitcoin. In the event that you consider Bitcoin to have a brighter future than Litecoin, you can simply opt to buy Bitcoin instead and enjoy the same potential benefits you get with owning Litecoin.
It’s a similar case with Bitcoin Cash, which was created in July 2017 due to a series of disagreements between traditional Bitcoin developers and miners who wanted the network to be faster and more accessible. Bitcoin Cash has all the benefits of Bitcoin whilst being a truly scalable and decentralised cryptocurrency.
A slightly leftfield selection would be Zcash. This is a cryptocurrency that operates in a similar fashion to Litecoin and Bitcoin, but with added anonymity behind transaction amounts and the parties involved. So, in this way, Zcash is more comparable to Monero.