So, what is Litecoin? the digital currency is touted as the cryptocurrency that will change the face of crypto-industry. But, what is it, how does it work, is it different from Bitcoin, and, if so, how? Keep reading to learn the inherent answers to these questions and much more.
Let’s get started, shall we?
What is Litecoin? Defining Litecoin
Litecoin is no longer the new kid on the block in the world of cryptocurrency. Popularly referred to as the Bitcoin’s little brother, Litecoin is the 4th largest in the cryptocurrency world’s pecking order, behind Bitcoin, Ether, and Bitcoin cash. Interestingly, Litecoin was forked off Bitcoin ledger a couple of years ago.
Litecoin, just like any other cryptocurrency like Bitcoin, is a decentralized, digital currency built on a blockchain framework. While there is a cloud of mystery around the creator of Bitcoin, the developer of Litecoin is a well-known ex-Google engineer, Charlie Lee. I can see some people rolling the eyes: “well, just another cryptocurrency out to confuse me!” Litecoin is actually a lighter, snappier version of Bitcoin.
That’s right; the so-called altcoin (alternative cryptocurrency to Bitcoin), this small crypto can deliver faster and more secure transactions than Bitcoin. You see, Bitcoin can deliver up to 7 transactions per second, which is significantly slow considering Visa platform processes thousands of transactions any given second. That’s perhaps the reason why Litecoin has become a darling for long- and short-term crypto investors. Get this: from the beginning of 2017, Litecoin value has surged by a whopping 7,291% while Bitcoin price had burgeoned by 1,731% by the end of 2018.
Litecoin: the Backstory
The journey of Litecoin began when Charlie Lee sought to create a lighter version of Bitcoin. After a few months of development and compiling, the first version of Litecoin was released on GitHub as an open-source software, and six days later the Litecoin Network went live. It began raising heads when it came to light that Litecoin could generate a block in less than 2.5 minutes, a feat that couldn’t be realized with Bitcoin.
How does Litecoin Work?
From a technical standpoint, Litecoin is essentially a fork of the client of Bitcoin Core. For those who are familiar with the “under the hood” process of Bitcoin, Litecoin will simply knock your socks off. It’s mined and stored in almost the same way as Bitcoin, but mining this light crypto uses Scrypt Algorithm for proof-of-work. That means miners can take advantage of high computing powers of GPUs to make the mining process a breeze.
What’s more — the basic desktop app is a simplified version of Bitcoin-QT which available for download from Litecoin website. The same also goes for the Litecoin wallet
Bitcoin vs Litecoin: the Difference
Bigger Mining Reward Prize
Just like Bitcoin, Litecoin mining reward prize started from 50 coins per block created. However, Bitcoin reward halves every 21,000 pieces whereas Litecoin rewards halves at every 840,000 blocks.
Litecoin’s exchange fees are around 0.02 LTC which is somewhat higher than that of Bitcoin which staggers at approximately 0.0001 Bitcoins.
Snappier Block Generation
Faster block generation is perhaps where Litecoin stands out most from Bitcoin. It takes only 2.5 minutes to create a block of Litecoin. For Bitcoin, block generation lasts about 10 minutes. That means Litecoin Network can confirm transactions faster than Bitcoin Network by a factor of 4. Accordingly, you can expect Litecoin to handle more volumes of transaction. The downside, however, is that higher block generation leads to increased orphaned blocks.
Reduced risk of double spending
If you assume both networks have similar hashing power, the double spending attacks on litecoin will be much reduced compared to Bitcoin. That is because of faster block generation. Of course, this improved transaction-ability makes Litecoin better crypto for borderless payment.
As you might already know, the Bitcoin supply is limited to 21 million coins. For Litecoin, the limit is far much higher, staggering at 840 million LTCs.
The Future of Litecoin
With the value of Bitcoin tumbling earlier in 2018, many people are taking new cryptocurrency with a grain of salt. Which begs the question: does Litecoin has a future? The answer is a resounding Yes; Litecoin will do exactly what is was built for: become a better version of much-loved Bitcoin.