If you want to know what is Litecoin, then this is the right guide for you. There are different virtual currencies in the market, and one of them is Litecoin (LTC). In this article, we will analyse and explain what is Litecoin, why it was created, and how it differentiates with other cryptocurrencies. At the moment, Litecoin is one of the largest cryptocurrencies in the world.
What Is Litecoin?
Litecoin (LTC), is a cryptocurrency created by Charlie Lee and a group of experts as a fork of the Bitcoin network in 2011. Litecoin complements the Bitcoin network and is the currency for transactions and payments. Bitcoin, instead is the currency for savings. People tend to call Litecoin the ‘silver’ to bitcoin’s ‘gold.’
The Litecoin Foundation is currently in charge of promoting this virtual currency around the world.
Charlie Lee wrote about Litecoin:
“Litecoin is the result of some of use who joined together on IRC in an effort to create a real alternative currency similar to Bitcoin. We wanted to make a coin that is silver to Bicoin’s gold. Various alternative currencies have come and gone.”
Litecoin works with a proof of work algorithm that allows interested parties to mine Litecoin in a similar way to Bitcoin. It is worth noting that Litecoin uses Scrypt as proof of work (PoW) hashing algorithm. This tends to be easier for CPUs and GPUs to mine that currency. This is one of the main differences with Bitcoin. Bitcoin needs too powerful ASIC miners that consume important amounts of electricity and are very costly. However, in recent years, it became increasingly difficult to mine this virtual currency.
Litecoin has different features that can be very useful for investors and merchants. The currency was developed in order to process fast transactions and allow people to easily send and receive funds. The main advantage is that it can just be done for a fraction of the fees that the Bitcoin network has.
The average Litecoin block takes 2.5 minutes to be processed. The Bitcoin network has 10 minutes blocks. Litecoin knew that fast transactions are not as secure as Bitcoin slow transaction. Despite that, they are very convenient for merchants. Litecoin is very fast and users do not need to wait for long periods of time.
But less time between blocks helps the network to process more transactions than Bitcoin. With the Lightning Network ahead, this difference could be reduced. Moreover, faster block times means that there will also be a higher number of orphaned blocks on Litecoin’s Network.
The amount of Litecoin available will be 4 times as much of these of Bitcoin. That means that the market will see 84,000,000 LTC and no more will be ever mined. That means that the currency will be, in the long term, a deflationary cryptocurrency.
As you can see, the Litecoin hash rate has remained stable over the last years. This shows that despite the increase in the interest for LTC, miners preferred to mine other cryptocurrencies. Bitcoin’s hash rate, for example, has never stopped growing. This plays a very important role in the security of the network.
The higher the hash rate, the more difficult it would be for attackers to succeed. Currently, LTC and BTC are among the most secure cryptocurrency networks in the world.
Where Can I Buy Litecoin?
Litecoin has become one of the most important cryptocurrencies in the market. Currently, it can be bought in several cryptocurrency exchanges and cryptocurrency ATMs. The most important platforms where to buy Litecoin are Coinbase, Binance, Kraken, Bitstamp and many others. Take into consideration that every single region in the world has different exchanges. Some of the platforms available in some countries may not offer services for others. You can also buy LTC with PayPal or Revolut.
Several countries have Cryptocurrency ATMs installed in neuralgic points. If you have one near you, you can always check whether it has Litecoin included or not. This would allow you to get fast and easy access to this digital asset. You can get more information about Litecoin ATMs in this link.
In general, it is very easy to purchase Litecoin. If you use an exchange, you will have to provide some details and top up your account. You will have to share your email address, a password and perhaps an ID verification.
It is very important to store virtual currencies using a hardware wallet. The cryptocurrency market has been full of scammers. If you want to be protected, Ledger is offering some of the most secure wallets in the market. Hackers and scammers would not be able to get access to your coins. Hardware wallets are not connected to the internet.
Moreover, exchange platforms are usually not as safe as hardware wallets. Why? Because they are targetted many times by hackers. In the past, several crypto platforms were affected by this issue. Many of them lost millions of dollars in virtual currencies. This is why holding our own digital assets is the most secure way to invest in them.
Litecoin in the Cryptocurrency Market
Litecoin is now the fifth-largest cryptocurrency by market capitalization ($4.78 billion). At the same time, it is one of the currencies with the largest trading volume in the last 24 hours. Moreover, Litecoin has been one of the top 10 cryptos in the market for years. The longest period of time in the top 10 for a cryptocurrency after Bitcoin.
At the moment of writing this article, Litecoin is being traded around $80 dollars and it has a supply of 61 million coins. In December 2017, Litecoin reached its peak when it was traded over $367 dollars per coin. At the same time, some crypto exchanges were trading this cryptocurrency for more than $400.
In 2017 it had an incredible 8200% rise. At the beginning of 2017, it was traded at $4.40 dollars per Litecoin. It is worth pointing out that cryptocurrencies are very volatile. That means that Litecoin’s price and position in the market change on a daily basis. Other cryptocurrencies may surge and others fall. This is why you should always understand how Litecoin performs.
Functionalities and Implementations
In the future, Litecoin could be used by merchants in order to accept crypto payments. In addition to it, LTC could be very functional to Bitcoin when it will implement the lightning network.
Charlie Lee explained:
“Think of it being two highways: Today, Bitcoin is packed full of cars and Litecoin is empty Even with Bitcoin packed, the cars are not coming to use the Litecoin highway today because it’s not connected and it’s inconvenient (centralized exchanges and slow on-chain transfers) to go across. LN will build bridges over the highway. But a side benefit is that these bridges will connect both highways together. Maybe the bridges on Bitcoin are enough such that cars will still stay on the Bitcoin highway. My bet is that the convenience and the cheaper tolls on Litecoin highway will convince cars to cross over and use Litecoin.”
Litecoin could also be used for many other things. Several companies are already offering Litecoin support, including PayPal and Revolut. That means that users in these platforms can get access to LTC in just a few simple steps.
Privacy Solutions for LTC
Charlie Lee announced on Twitter that they want to implement private transactions to Litecoin. This is in order to preserve users’ privacy and data. This would allow the digital asset to be one of the few privacy-focused cryptos in the market. At the moment, Monero (XMR) and ZCash (ZEC), are the largest privacy-focused digital assets.
As per Charlie Lee, they will be adding confidential transactions to LTC. Furthermore, they will be testing the MimbleWimble implementation that is expected to bring other private features to the digital asset. This is one of the latest innovations in the cryptocurrency industry.
With private transactions, the funds transacted cannot be seen by others more than by the recipient and sender. This is a very positive development for the network that would protect users and their privacy. Once this implementation is completed, Litecoin will be the largest digital asset with private features enabled in the market.
This could bring new users to the Litecoin ecosystem. Moreover, it can help users process transfers without being worried about their privacy. As governments continue to control the things we do, cryptocurrencies such as LTC are helping users protect their information.
Litecoin has halved on August 5, 2019 reducing the new issuance of LTC from 25 LTC per block to 12.5 LTC per block. That means that miners are going to be receiving fewer LTCs each time they find a new block. The decreasing new issuance in Litecoin is expected to help the digital currency grow in the future. With a bigger demand for the digital currency and a lower issuance, the price of Litecoin could eventually be positively affected.
Although the digital currency has recently halved, the hash rate on the network remains very high. As Charlie Lee explained, the Litecoin network kept 97% of its hash rate after the fork.
504 blocks have been mined since the halving. This is 1/4 of the way to the next diff change. 21.65 hrs has elapsed since the halving. Normally on average it takes 21 hrs for 504 blocks.
This means 97% of pre-halving hashrate still mining LTC. 👍
Next diff change in ~2.7 days. pic.twitter.com/UAeSw1CMbK
— Charlie Lee [LTC⚡] (@SatoshiLite) August 6, 2019
The next LTC halving is expected to be in 1457 days from now, around 4 years. In this way, the supply of this cryptocurrency will be reduced even further until all the LTC (84,000,000) are mined. After the halving, the price of the digital asset surpassed $100 but shortly after went down to $97.
Therefore, halvings are a positive thing for virtual currencies. They help networks reduce the new issuance of coins even if demand grows. This has an impact on the availability of coins in the market. The higher the demand and the lower the supply, the higher should the price be.
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