Litecoin

Litecoin was created by former Google engineer Charlie Lee and is one of the first “altcoins” – the name given to cryptocurrencies other than Bitcoin (and sometimes others other than Ethereum).

“Litecoin is the second oldest cryptocurrency, which was replaced by Bitcoin in 2011,” says Jay Blaskey, digital currency expert at BitIRA. “It was designed to be used for quick, secure and affordable payments.” Think of it as bitcoin going out.

The purpose of starting Litecoin is to improve Bitcoin in different ways. For one, Lee developed a new hashing algorithm for Litecoin called Scrypt (pronounced S-crypt). A simple algorithm supports the speed of Litecoin transactions. Bitcoin has a fast processing rate of around five transactions per minute. Creating a new block on the Bitcoin blockchain can take about 10 minutes. This fast transaction speed discourages merchants who want to accept Bitcoin as payment. You can wait up to an hour, on average, for the six confirmations required for a Bitcoin transaction. Imagine making an online purchase with a credit card and staying at the “your transaction is being processed” screen for an entire hour.

On the other hand, Litecoin’s transaction processing speed is 54 per second and a new block on the Litecoin blockchain can be created approximately every 2.5 minutes. Although Litecoin still requires a minimum of six confirmations from most exchanges to be considered immutable, peer-to-peer (P2P) payment networks can settle Litecoin transactions almost entirely. be immediate.

Improved transaction speed targets to show customers that they no longer need to be frustrated by long Bitcoin settlement times. Instead, they can accept Litecoin and process payments quickly and thus transact faster and faster than other digital payment systems.

How Litecoin Works

Like Bitcoin, Litecoin works on a contract-of-service principle. But it uses Scrypt hash algorithm instead of SHA-256 to increase transaction speed of LTC. Litecoin has a small supply of 84 million LTC coins. New coins are mined with every transaction block added to the network. In the beginning, the Litecoin network offered 50 LTC for miners to mine the block.

But the network takes out every 840,000 new mining rewards, which happens about every four years. The network will continue to reduce the reward until all 84 million coins are mined.

Until December 2020, the network pays 12.5 LTC for each new block. The next half, which is expected to happen in August 2023, will reduce the fee to 6.25 LTC.

Features of Litecoin

Litecoin is specifically designed to reduce the time it takes to validate new blocks and to maintain security. In this section, we will examine some of its features.

Business speed

Litecoin has a transaction processing speed of 54 TPS, which is significantly higher than Bitcoin’s transaction processing speed of 5 TPS.

scalability

Litecoin’s block time is two and a half minutes, which is four times faster than the ten minutes it takes Bitcoin to create a block. As a result, the Litecoin network is able to achieve high productivity.

Litecoin is safe or not??

Charlie Lee, the founder of Litecoin and a former Google employee, spoke about the security of the platform. After the launch of Crypto51, a new tool that defines what the loss will be if a 51% attack defeats various cryptocurrencies on their network, the crypto community seems to be very nervous and think that it could be something fear for each other. . Lee assured users of the Litecoin platform that there is no need to worry since the network has little threat of attacks and Litecoin is safe and healthy. The founder said that well-distributed mining pools help with security, as well as increasing hashing times and boasting high coin prices. The risk of Litecoin is similar to the risk of many cryptocurrencies. First, potential buyers should be wary of scammers. Unfortunately, there are always people who are willing to take advantage of others.

Cryptocurrency, which is an exciting and sometimes misunderstood new territory, is an opportunity for such work. In addition, cryptocurrency wallets and exchanges are not impossible to hack. Access can be a big concern for anyone deciding where to buy and store their cryptocurrencies. If cryptocurrencies are looted and stolen, there will be no way to get them back.

Similarities between Bitcoin and Litecoin

Litecoin (LTC) and Bitcoin (BTC) are fiat currencies controlled by a central government. They also share similar belief systems and business processes.

Proof of employment contract process

The same process is used to mine both cryptocurrencies. They use the Proof-of-Work (PoW) verification system to add new blocks to the blockchain. This system rewards the first person to solve a mathematical problem (i.e. mining) to achieve a distributed consensus.

Security measures in business

Litecoin and Bitcoin can be bought and traded through cryptocurrency exchanges. They can be stored in a digital wallet or cold storage for safekeeping between transactions.

The difference between Bitcoin and Litecoin

Litecoin and Bitcoin are similar to each other but they are two very different cryptocurrencies.

Algorithms

Although both use the PoW verification process to add new blocks, they use different crypto mining algorithms. Bitcoin uses the SHA-256 algorithm while Litcoin uses a relatively new algorithm known as Scrypt which is less complicated than Bitcoin’s. Despite this, you will still need an ASIC miner to mine Bitcoin or Litecoin, which can be expensive.

Business speed

One of the best qualities Litecoin has over Bitcoin is its high transaction speed. Litecoin has a maximum capacity of 56 transactions per second (tps) while Bitcoin is only around 7 tps. The average transaction time for Litecoin is 2.5 minutes while a Bitcoin transaction takes about 10 minutes to be successfully confirmed and entered into the blockchain.

Business fees

Another area where Litecoin is superior to Bitcoin is its low transaction fees. You can expect to pay around $0.04 on average in transaction fees with Litecoin while Bitcoin charges an average of $7.60. The low cost of Litecoin is because LTC’s payments to miners do not come from transaction fees unlike Bitcoin.

Limitation of income and withholding of wages

Bitcoin supply is only 21 million BTC while Litecoin is limited to 84 million LTC. As the coins are used to pay the miners, the wages are designed to be halved over time to reduce the number of new coins produced and create scarcity. Bitcoin’s reward is reduced every 210,000 blocks while Litecoin’s reward is reduced every 840,000 blocks. These events take place approximately every 4 years.

Value and Market Cap

As the first cryptocurrency, Bitcoin is seen as a store of value rather than a daily transaction. At the time of writing, it is worth $47,360 with a market value of $891 billion. It is still the highest of all cryptocurrencies. Litecoin is not popular, but it is considered to attract the attention of the buyers as an everyday digital currency. Its current price is $182 with a market capitalization of $3 billion.

Main advantages of Litecoin

Key benefits of Litecoin include, but are not limited to:

• The ability to transfer money internationally without a wire transfer is expensive, and it takes minutes to complete a transaction, even if it has to go around the world.
• Mining is required on the network for transactions, resulting in a fee for each transaction. This helps prevent attacks on the network, making them less expensive for the attacker (although not recommended for all situations).
• It is not at the mercy of central financial institutions such as banks and money transfer services with low deposit or monthly fees, ATM withdrawal fees to be able to use, and require you to submit too much personal information to send if it is receiving money. . It’s easy to create a Litecoin wallet and accept funds. Just install the app and save your private key somewhere safe (Not on your computer or phone). Its seamless design helps to ensure global availability, without the geographical distance problems faced by servers and ISPs. For example, there may be miners near you, while the central server may not be available if the owner does not operate in your area. You can support the network and increase local access by purchasing your own miner.

Disadvantages of Litecoin

• The extraction process is energy intensive. It is not accepted as Bitcoin or fiat currency.
• Some technical knowledge is required to save your coins properly. Some people do not back up their private keys, making them unable to access their money if their computer is not working.
• Expanding it in the future is a challenge, but now there are fast cryptocurrencies, such as Raiblocks. For the above purpose, you can switch to a new cryptocurrency if it will take over and make the price of Litecoin fall. However, this is an easy task to accomplish.