Litecoin currency is a relatively young digital currency, and on the other hand, it has a higher speed and a small transaction fee. For this reason, some people are attracted to buy Litecoin.
But what is Litecoin digital currency? In this article, we will examine and understand Litecoin and then we plan to compare it with Bitcoin.
Let’s explore together:
- What is Litecoin?
- Predicting the future of Litecoin
- Storing of Litecoin
- How to buy and sell LTC
- Mining Litecoin
- Halving
- Using Litecoin
- Advantages and disadvantages of Litecoin
- Introducing the best wallets
- What is Bitcoin?
- What is the difference between Litecoin and Bitcoin?
- Frequently Asked Questions on Litecoin
What is Litecoin?
Former Google engineer Charlie Lee, creator of Litecoin, first created Litecoin. This token is considered one of the first altcoins.
Litecoin is a cryptocurrency that was created from a fork in the Bitcoin blockchain in 2011. The currency was originally designed to address developer concerns that Bitcoin was becoming too centrally controlled.
This currency was designed for safe, fast and low-cost payments and seems like a spin-off of Bitcoin.
Litecoin’s goal was to improve the performance of Bitcoin in different ways. Since Bitcoin has a slow transaction speed and does only 5 transactions per second, they created this token with a high transaction speed.
The algorithm used in this currency supports high transaction speed. It should be noted that, in addition to the slow speed of transactions with Bitcoin, the production of a new block also takes about 10 minutes in the Bitcoin blockchain.
This token generates 54 transaction processing in one second and a new block in the Litecoin blockchain every 2.5 minutes.
Transactions of this token in P2P crypto payment networks are settled immediately. However, most other exchanges require at least 6 confirmations to clear the transaction of this token.
With this increased speed in the transaction, there is no need to waste time to complete the transaction. Also, if traders approve the token, they can experience a quick and easy transaction.
Overview of key points:
- This token is a digital currency that was founded in 2011, two years after Bitcoin, by a former Google engineer named Charlie Lee.
- It has similar features to Bitcoin, but has a different algorithm. The aim of this digital currency is to become a medium for daily transactions.
- This currency has a faster transaction processing time compared to Bitcoin.
Predicting the future of Litecoin
It is difficult to predict the future of Litecoin with certainty for this token. The future of this digital currency depends on the behavior of investors, governments, traders and the general public.
The digital currency market has many fluctuations and the predictions made are by no means certain. On the other hand, this token is a nascent digital currency. This makes it difficult to predict the future.
The demand for this digital currency may exceed its production. So its value also increases. But it is also possible that the demand for its production will not increase, therefore its value will also decrease.
If the value of the asset decreases, investors and traders should turn to other digital currencies. It is difficult to determine how investors, traders, crypto fans, governments and the general public will treat this token in the future.
Storing of Litecoin
All cryptocurrencies are stored in wallets created on the blockchain. Access to the wallet is available to people anywhere in the world.
This is one of the advantages of decentralized and international cryptocurrencies, of which this token is considered a part. You can access your wallet by having the internet.
One of the biggest advantages of the wallets of these decentralized digital currencies is the absence of banks’ involvement in it.
How to buy and sell LTC
There are different ways to buy and sell, which is further explained in this article
Direct buying and selling
There are a number of platforms that you can use to connect directly with cryptocurrency buyers and sellers. One of these platforms is the P2P platform.
In this way, you directly communicate with the buyer or seller of this token and make the transaction. Of course, using such platforms requires experience and high precision. Because its security must be checked before buying and selling.
Ownership through mining
Another way to get this token is mining. You get it through mining. Of course, this method has a very high cost and is reasonable only if you get an advanced mining device.
Buying and selling from digital currency exchange
The exchanges connect you to the digital currency market so that you can buy and sell directly. This method is one of the safest methods of buying and selling digital currency.
Mining Litecoin
There are complex mathematical problems called hashes that miners must solve in order to gain the right to register new transactions on the blockchain.
Once a block is closed, its blockchain cannot be changed. The first miner who can solve the transaction hash through the proof-of-work consensus mechanism is rewarded.
The reward for solving each hash for a miner is 12.5 Litecoins.
At first, mining may seem like a simple thing that you can do with a personal computer in your room. But make no mistake.
Solving the hash requires high computing power and also consumes a lot of energy and space. In fact, most of the mining that is done is by mining farms and crypto miner pools that use sophisticated hardware.
Halving
Like Bitcoin, this token is halved to help control the supply. The supply of this token was limited to 84 million.
With these interpretations, when a miner adds a new block to the blockchain of this currency, he receives a reward equal to the amount of this generated token.
If halving were not done, the supply would increase indefinitely under these conditions.
Through halving, the miner’s reward is reduced (halved) during the new blocks he adds to the blockchain.
More precisely, at the beginning of creation, the reward of miners for adding a block was 50 LTC. But over time, through halving, this reward reached 12.5 LTC. According to predictions, the next halving for this token may happen in 2023.
History of Hovings:
- August 25, 2015: 50 to 25 LTC
- August 5, 2019: 25 to 12.5 LTC
- August 23, 2023 (expected): LTC 12.5 to 6.25
Using Litecoin
This token is a very simple and liquid currency compared to other digital currencies.
In a way, this currency makes your transactions easier. You can use BitPay, CryptoPay digital currency programs to use this currency and make your transactions.
Advantages and disadvantages of Litecoin
As mentioned above, Litecoin is a faster and cheaper currency than other digital currencies such as Bitcoin. Currently, the Bitcoin transaction fee has increased and is something like 3.92%. In a situation where the transaction fee is about 0.06%.
So, the advantages of this currency can be considered as high speed and low fees in transactions. In the rest of the article, we will also discuss the disadvantages of this digital currency.
Some other advantages of this currency in general are:
- International funds transfer is also available for this digital currency. You don’t even need to go through the traditional transfer process of the past.
- It is much easier to create a wallet and accept funds through this digital currency.
- Litecoin has high control over the high volume of transactions. This digital currency is suitable for people who need fast approval and lower fees.
- In this digital currency, an algorithm is used that can generate 4 times more coins per year than Bitcoin.
- The design of this digital currency is decentralized. For this reason, it has worldwide access and there is no distance limit.
Charles Lee, the founder of Litecoin, gave away most of his assets in 2017. He cited this assignment as a conflict of interest. Lee’s work caused the loss of people’s trust in digital currencies.
Many analysts believe that Charles Lee’s move had a great impact on investors, which is one of the disadvantages of this currency.
The disadvantages of Litecoin are:
- High energy is used for mining this digital currency.
- This digital currency, like Bitcoin or fiat currencies, has not been accepted among investors.
- Due to the nascent nature of this digital currency, it is very difficult to estimate its value in the future. For this reason, you may switch to another digital currency if its value decreases.
- In investing, you need technical knowledge to keep your coins safe.
Introducing the best wallets
There are different wallets for storing Litecoin digital currency. Familiarity with the types of cryptocurrency wallets is essential for digital currency investors. Some of the more popular wallets include:
Ledger Nano X wallet
Ledger Nano X is placed in the category of cold wallets. Due to its high security, this Litecoin wallet is a good option for people who are looking for a safe way to keep their capital.
Because the possibility of hacking is almost zero due to the protection and security layers. Some people mistakenly think that Ledger Nano X wallet may be difficult to use, but the user interface of this wallet is easy and most people can easily use it.
Trezor wallet
Trezor is the first digital currency hardware wallet that is very popular due to its high security. This wallet is a small device that is connected to the computer by means of a USB cable.
Litecoin private keys are stored offline in Trezor , and the entire wallet is backed by a 24-word recovery phrase. This wallet is offered in two models, TREZOR One and TREZOR Model T.
Trust wallet
Trust Wallet is undoubtedly one of the best software wallets for Android and iOS operating systems. One of the important advantages of this wallet is the support of most known digital currencies.
This wallet has taken special security measures to protect its users’ assets against any hacking and theft.
For example, private keys are not stored on the server. These keys are only stored in the user’s mobile phone. For this reason, no other person except the user can access them.
Also, transaction fees in the Trust Wallet wallet are lower than normal transactions due to the use of native addresses to receive Litecoins.
Exodus wallet
Exodus is another popular software wallet for storing digital currencies. This wallet was launched in July 2016 (July 2015) by Daniel Kestnaly and JP Richardson. Exodus user interface, in addition to being beautiful and attractive, interacts effectively with the user.
Another advantage of this wallet is the full-time support of the development team for users. But it is important to note that Exodus lacks two security features, two-step verification and multi-signature capability, and relies on a password and 12 word strings for data recovery to ensure security.
Atomic Wallet
Atomic is one of the popular and practical wallets for storing Litecoin digital currency. This wallet is designed so that even novice users can use it. But in addition to simplicity, many useful features have been made available to users.
The use of this wallet is free, but a fee must be paid to use some of its features. Atomic Wallet has a mobile and desktop version for all operating systems.
In addition to supporting Litecoin, this wallet also provides the ability to store more than 500 other digital currencies.
What is Bitcoin?
In this part of the article, we will discuss what is Litecoin digital currency and how is it different from Bitcoin.
let’s talk about Bitcoin and its performance.
In 2009, Bitcoin was introduced as the first digital currency. Since then, Bitcoin has been used as a tradable currency.
Blockchain is used for Bitcoin transfers, maintaining validity and security of its database, which was created with a centralized computing power and a reliant community.
Among the notable features of Bitcoin, the following can be mentioned.
In the Bitcoin blockchain, a consensus and validation mechanism is used, which has the computing power of the GPU. Finally, Bitcoin transactions are verified in the blockchain.
SHA-256 is used in blockchain encrypted hashing. This hash of the input produces a fixed-length output to be encrypted.
What is the difference between Litecoin and Bitcoin?
What is Litecoin digital currency?
So far we know that this currency is a fork or a branch of Bitcoin. In the following, we discuss the key differences between these two popular digital currencies.
The first difference is the difference in hash performance. SHA-256 hash is used in Bitcoin, and this hash has a high speed in ALU.
The second difference in the capital market of these two digital currencies. As you know, Bitcoin has a lot of mining ability. Due to the fact that it is extracted by farms and ponds, it has gained high popularity.
On the other hand, the demand for the supply of Bitcoin has increased so much that its exchange rate for dollars is very high.
But this token is not like this. The market capacity of this currency is much lower than Bitcoin, because Bitcoin has a lower supply with a higher demand.
The third difference between these two digital currencies is their distribution, which is considered a main difference. This difference is related to the total number of coins produced for each cryptocurrency.
Here, Litecoin is superior to Bitcoin. The Bitcoin network cannot produce more than 21 million coins, but Litecoin can produce 84 million coins.
The fourth difference is the difference in the transaction speed of these two digital currencies.
Basically, transactions are technically instantaneous on networks. But the confirmation of these transactions by other participants takes time.
Since Litecoin was founded with the goal of prioritizing transaction speed, its transaction speed is faster than Bitcoin. It should be noted that the average time to confirm a transaction on the Bitcoin network is about 9 minutes.
Of course, in the meantime, you should also consider the difference in Internet traffic speed, which also affects the transaction speed. But this average time to confirm a transaction in Litecoin is equal to 2.5 minutes.
Frequently Asked Questions on Litecoin
Bitcoin or Litecoin is better?
Litecoin is generated much faster than Bitcoin and has relatively low transaction fees. But Bitcoin has a high value. If you are looking for valuable coins, you are advised to invest in Bitcoin.
What are the best wallets?
Core Litecoin wallet, LTC Electrum, Jaxx, Exodus, Atomic Wallet, Trust Wallet
Is it possible to mine Litecoin? Is it profitable to extract it?
Litecoin mining is possible for any computer. Of course, this does not mean that you will achieve profitability by mining. You can run the mining software on your computer and earn some LTC.