So, what is Litecoin?
Several people only know of Bitcoin as a cryptocurrency, but there are a lot of others to choose from like Litecoin. The term cryptocurrency refers to a payment that can be made only electronically. In other words, it is internet money.
Litecoin can also is referred to as a digital form of money that works within a decentralized network format and, enables quick payment transfer across the world without going through any security compromises like the traditional methods of payment. For instance, when utilizing credit cards, cash or your traditional bank accounts to buy goods and services, the payment you made must first be approved by your bank.
In addition, there is always transaction fee involved with traditional payment methods. The idea behind cryptocurrency is to reduce; transaction fees, delays in the payment process among other annoyance that is associated with tradition payment methods. Digital currencies such Litecoin are not owned by anyone and this explains why there are no fees attached to them.
When was Litecoin launched?
Litecoin was first introduced in October 2011 by Charlie Lee and was among the fastest alternative coins that were created through the original Bitcoin source. Therefore, this may be referred to as a shadow of Bitcoin and, it is also popularly known as the silver to the golden Bitcoin. Litecoin cannot replace Bitcoin because they complement one another. In other words, Litecoin is a more easily accessible type of the popular cryptocurrency. During many of his interviews, Charlie Lee noted that Litecoin is unique because it solves some of the shortcomings that are associated with Bitcoin and other digital currencies.
- Use of Litecoin: Litecoin is used to carry out direct transfer of funds between businesses and people without the requirement of intermediaries such as banks.
- The transfer of funds also occurs minus any major processing fees.
- Litecoin Technology: Like other digital currencies, LTC utilizes a technology of decentralized database of transaction known as Blockchain.
- Blockchain assures transparency, security, and fast movement of digital products such as intellectual property and money.
- Transparency is one of the key benefits that come with Blockchain technology. Litecoin needs this technology to avoid dishonesty in transactions or double spending from happening. For instance, if you have one Litecoin left to spend, Blockchain ensures that you do not use the same to conduct multiple transactions such using the same crypto coin to buy a new phone and to pay back a debt that you owe at the same time.
Pros of BlockChain Technology.
- Decentralization: Blockchain is that it enables direct sharing of a database without the need of central administration.
- All transactions are processed in an independent way since Blockchain have their way of proving the validity and making authorization.
- Payment methods with a centralized authorization system often require companies or financial institutions to hire third-party companies who can develop security systems to bar intruders from interfering with the information kept at the central application. However, with Blockchain technology, there is smart cryptography system that secures the database.
- Less cost of transaction fees: Since Blockchain does not require any middle approval; it has a higher ability to decrease the costs of transactions. This is unlike banks that will deduct a significant amount of money as processing fees.
- Promotion of honesty and transparency: The public can see all changes that take place in Blockchain. Furthermore, transactions or Litecoin activities cannot be deleted. With Blockchain, users can never have doubts because the system is trustworthy and, transactions stay just the way they made in the beginning.
- Long lasting and reliable: Because of Blockchain posses no central application, there is no worry for central attack or hacking.
- High quality: Blockchainusually gives data that is efficient, prompt and one with the highest levels of accuracy.
- Quick Transactions: Sending money from one bank to the next can take several hours and even days, especially if the transaction was conducted out of working days or hours.
The Blockchain cons:
- Complexity Verification: Each and every transaction that occurs within the Blockchain must be verified digitally. Generating the verification codes or signature involves the complex use of a private-public system known as cryptography.
- Blockchain requires a large amount of computation. All transaction activities that occur in the database have to be processed in independently by every communication point in the network.
Development of Litecoin
Litecoin is more advanced than Bitcoin and other digital currencies in the following ways:
- Transaction speed: Litecoin possess more transactions speed than Bitcoin and other digital currencies. According to Engineer Charlie Lee, the developer of Litecoin. LTC can start legal transactions faster and process more of coins with a short period compared to other Cryptocurrencies.
- Supply of coins: The real value of different Cryptocurrencies is determined by their limited supply of coins. Currently, Bitcoin has a supply of about twenty-one million coins while Litecoin has eighty-four million.
- Market capitalization: Litecoinis categorized among the top seven Cryptocurrencies in the market, but this is bound to change with the number of coins being circulated and price.
Differences between Litecoin and Bitcoin
Bitcoin and Litecoin were introduced around the same time. Its creator Satoshi Nakamoto launched Bitcoin in 2009, as the first digital currency in the world. Two years later, Litecoin was introduced.
- Transactional differences: Litecoin can manage a bigger number of transactions. Bitcoin, on the other hand, needs several key upgrades to match the level of transactions Litecoin handles.
- Time differences: Litecoin confirms transactions faster than Bitcoin. For example, two transactions that take 10 minutes with Bitcoin will only take between 3-4 minutes with Litecoin. There is also less risk of spending the same LTC twice due to high speed.
Differences in Mining
Mining simply means acquiring crypto coins. Both Litecoin and most other Crypto coins are generated through mining.
The main differences in mining between Bitcoin and Litecoin:
- Different systems that they use.
- Litecoin holds more importance thanks to using a more sophisticated system known as the scrypt algorithm.
- Scrypt algorithm has more serialized calculations than Bitcoin’s Hashing algorithm.
- Litecoin’s scrypt algorithm also has larger memory capacity, with a high-speed RAM.
The Litecoin Market
After it was announced in 2011, LTC started experiencing gradual growth in price. The first major growth in price came in November 2013 when it went from $13.977 to $37.22. The period between July and January 2017 experienced massive up and down price swings. However, the market started pulling major surprises in May 2017.Currently; the digital currency is operating above $200 and is still experiencing unprecedented growth.
- Price Volatility: There are several factors that make Litecoin price volatile.
- Bitcoins: Being the most popular cryptocurrency, Bitcoin’s price change can have an impact on other cryptocurrencies. For instance, when Bitcoin prices fall, many people start buying other cryptocurrencies such as Litecoin, and this drives the prices up.
- Supply and demand: As a finite currency, the price is often decided with supply and demand of Litecoins. In other words, when for some reason people start buying more Litecoins, while the Litecoin mining is having issues to supply enough Litecoins to the market, the prices increase.
Why is Litecoin market going up so fast?
- Direct relations: There are key activities in Bitcoin that are causing daily improvement in LTC future trading market. For example, many people and businesses are trading in Bitcoin market already, therefore, increasing the level of activities in Bitcoin market and, further resulting in increased transaction fees and overcrowding of the network.
- Understanding of Litecoin: With the help of research and information about Litecoin and cryptocurrency, people and businesses are becoming more aware of the differences between various digital currencies.
- Since Litecoin has a unique advantage over Bitcoin including, a constant increase in price, it has the potential of attracting more new users and increase in trade among investors.
To sum it up
The benefits that Litecoin has over Bitcoin will cause it to grow even bigger in the next 1 to 2 years. With key information about LTC at your disposal, you can start trading today. Thank you for reading, we have covered other more educational topics on our website that will enhance your Litecoin and general cryptocurrency understanding.