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Litecoin

What Is Litecoin (LTC) and How Does It Work?

Litecoin (LTC) is a cryptocurrency created by a former Google developer named Charlie Lee in 2011, two years after Bitcoin. Litecoin, like Bitcoin, is based on an open-source global payment network that is independent of any central authority. Litecoin varies from Bitcoin in several ways, including its higher block creation rate and its usage of the Scrypt proof-of-work algorithm.

It is one of the first cryptocurrencies to be created using Bitcoin’s original open source code.

It was at first a serious challenger to Bitcoin. Litecoin’s popularity has declined as the cryptocurrency market has gotten considerably more saturated and competitive in recent years with new offerings.

Litecoin has long been seen as a counter-measure to Bitcoin. In fact, Lee dubbed Litecoin the “lite version of Bitcoin” when he first unveiled it on a popular Bitcoin forum. 1 As a result, Litecoin shares many of Bitcoin’s features while also modifying and tweaking those parts that the development team felt should be improved.

With a market valuation of slightly under $15 billion as of November 2021, 1 LTC is worth roughly $215, making it the 14th-largest cryptocurrency.

TAKEAWAYS IMPORTANT

Litecoin is a cryptocurrency that was created by a former Google engineer named Charlie Lee in 2011, two years after Bitcoin.

Litecoin can be used to pay people all over the world without the need for a third party to handle the transaction.

Litecoin is the 14th largest cryptocurrency by market capitalization.

The total number of Litecoins in circulation will never exceed 84 million.

Getting to Know Litecoin

Litecoin, like other decentralized cryptocurrencies, is not issued by a government, which has traditionally been the only organization society has trusted to issue money. Litecoins are created by an elaborate cryptocurrency procedure called mining, which involves processing a list of Litecoin transactions. Instead of being regulated by a central bank and coming off the press at the Bureau of Engraving and Printing, Litecoins are created by an elaborate cryptocurrency procedure called mining, which involves processing a list of Litecoin transactions.

Unlike other currencies, Litecoin’s supply is limited. The total number of Litecoins in circulation will never exceed 84 million. The Litecoin network generates a new block–a ledger record of recent Litecoin transactions all over the world–every 2.5 minutes. 45

Mining software verifies the block and makes it visible to any system participant (called a miner) who wants to see it. The next block enters the chain, which is a record of every Litecoin transaction ever made, once a miner verifies it. 5

Mining Litecoin has incentives: the first miner to correctly validate a block receives 12.5 Litecoins.

6 The number of Litecoins granted for such a task decreases with time, similar to Bitcoin. It was halved in August 2019, and it will continue to be halved at regular intervals until the 84,000,000th Litecoin is mined. 7

LTC halving dates have been:

25th of August, 2015 (50 LTC -> 25 LTC)

5th of August, 2019 (50 LTC -> 12.5 LTC)

(anticipated) August 23, 2023 (12.5 -> 6.25 LTC)

Particular Points to Consider

Mining bitcoin at a profitable rate necessitates a massive amount of computing power, which is provided by specialized hardware. Most personal computers’ central processing units aren’t fast enough to mine most cryptocurrencies. Litecoin, on the other hand, differs from the bulk of other cryptocurrencies in that it can be mined on a personal computer. 5 Although the bigger a machine’s mining capacity, the more likely it is to earn something useful for a miner.

Even the US dollar and gold bullion are only as valuable as society perceives them to be. The dollar’s value would drop in no time if the Federal Reserve began printing too many banknotes. This phenomena is not limited to money. Any good or service loses its value as it becomes more widely and inexpensively available. From the beginning, the designers of Litecoin recognized that establishing a reputation in the marketplace would be challenging. The founders may at least ease people’s anxieties about overproduction by limiting the quantity of Litecoins in circulation.

The Litecoin Foundation forecasts that the maximum of 84 million Litecoins would be achieved in 2142.

What Is the Difference Between Litecoin and Bitcoin?

The biggest significant difference between Litecoin and Bitcoin is the encryption techniques they use. The SHA-256 algorithm is used by Bitcoin, while Litecoin utilizes a newer algorithm called scrypt.9

When compared to Bitcoin, Litecoin has several intrinsic advantages. Its popularity stems from the fact that it was founded with the objective of maximizing transaction speed. The average transaction confirmation time on the Bitcoin network is currently little under nine minutes, whereas Litecoin’s is around 2.5 minutes. Because of its faster block generation time, the Litecoin network can process more transactions. 105

The market capitalisation of Bitcoin is substantially higher than that of Litecoin. The total value of all bitcoins in circulation is about $1 trillion as of August 31, 2021, whereas Litecoin’s market capitalization is around $11.9 billion. The market valuation of Bitcoin continues to surpass that of all other digital currencies. 2

Bitcoin and Litecoin both have limited supply. Bitcoin, on the other hand, has a fixed supply of only 21 million coins, whilst Litecoin has a total fixed supply of 84 million coins. 1

Litecoin’s Objectives

Like all virtual currencies, Litecoin is a type of digital money. Litecoin can be used to buy products and transfer money between accounts by both individuals and institutions. Participants can use Litecoin to conduct transactions without the assistance of a bank, credit card provider, or payment processing firm.

Rather than focusing on its use, many investors are considering Litecoin as a long-term investment. Investing in Litecoin, like any other currency, is based on the assumption that it will grow in value over time.

How Does Litecoin Work and What Is It?

Litecoin is a peer-to-peer (P2P) virtual currency, meaning it has no central authority. Individuals and institutions all throughout the world can use the Litecoin network to make quick, near-zero-cost payments. The proof-of-work (PoW) algorithm is used by Bitcoin, Litecoin, and many other cryptocurrencies to protect their networks. Essentially, PoW requires one party to demonstrate to all other network participants that a certain amount of computing effort has been done. Unlike Bitcoin, which employs the SHA-256 PoW hashing method, Litecoin uses the Scrypt PoW technique, which is less resource-intensive.

What Is the Purpose of Litecoin?

Litecoin can be used to pay people all over the world without the need for a third party to handle the transaction.

What is the highest price that Litecoin has ever reached?

LTC reached an all-time high of $410.26 on May 10, 2021. On January 14, 2015, it hit an all-time low of $1.15. 4

What Was the Original Price of LTC?

1 LTC was worth roughly $4.30 when it first launched in 2013.

When was the last time Litecoin was halved?

Mining is used to create Litecoin tokens, just like it is for Bitcoin. Miners are rewarded with Litecoin for engaging in the mining process. A Litecoin halving occurs when the amount of Litecoin rewards provided to miners for each block is halved.

The goal of Litecoin halvings is to keep the currency’s purchasing value. On August 5, 2019, the last Litecoin halving took place. The mining reward was dropped to 12.5 Litecoins per block on this day, from 25 Litecoins per block previously. 11 The following is the

How Many Litecoins Are Still Available?

There will only be 84 million Litecoins in circulation at the end of the year. There were just over 69 million Litecoins in circulation in November 2021. 2 There are only about 15 million LTC remaining to mine.

Final Thoughts

Once a currency has reached a critical mass of users who believe it reflects what it claims and is unlikely to lose value, it can continue to be used as a means of payment. Litecoin has a long way to go before it is widely adopted. However, when cryptocurrencies gain acceptance and their values settle, one or two of them–possibly including Litecoin–will emerge as the digital realm’s standard currencies.

What do you think?

Written by Trevanna Gordon

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