What Is Litecoin LTC? How It Works, History, Trends and Future

What is Litecoin

Lee appears to have an accessible and open nature compared to the mysterious secretive Satoshi. The fact that Lee is capable of making light (Lite) of the situation is very humanizing. Additionally, you’d be hard pressed to find any serious claims or illusions of grandeur within the Litecoin camp. It’s meant to make cryptocurrency accessible and usable for everyone and is perfectly fine with taking a back-seat What is Litecoin role to Bitcoin. All of which to say, though investing in Litecoin does offer some upsides — the currency has high liquidity, for one, and a full decade’s worth of staying power, for another — it’s not without some risks. Although in theory Litecoin can be used for swifter payments, the reality is that the adoption of crypto as a universal means of payment and legal exchange is still up in the air.

  • A big differentiator between Litecoin and Bitcoin are the cryptographic algorithms they employ.
  • The increased competition has lowered the demand for LTC, which in turn has impacted its price — and the lower price means it’s less lucrative for miners, who get compensated with Litecoins.
  • The crypto space can seem like a minefield of conflicting ideas because everyone has their favourite coins and projects.
  • In fact, the Litecoin Foundation announced in November 2021 that LTC could be used as a payment method via the Litecoin VISA debit card by converting LTC into USD in real-time.

The first difference between Litecoin and Bitcoin lies in their maximum supply cap. Bitcoin has a supply capped at 21 million, while Litecoin’s supply is constrained to 84 million. Because exchanges are regulated and regulations are still being developed, the places you can buy and sell cryptocurrencies fluctuate.

Litecoin Disadvantages

But even if you have software you trust, you must remember and secure a password or key that only you know. This has been an issue with crypto, as people who forget their https://www.tokenexus.com/ passwords essentially lose the assets. Bitcoin leads the crypto-verse in terms of market cap, and therefore has a much greater market capitalization than Litecoin.

What is Litecoin

Transactions on the Litecoin network are grouped into blocks, which are added to the blockchain through mining, where miners use computational power to solve complex mathematical problems. The first miner to solve the problem adds a new block to the blockchain; in return for their work, miners are rewarded with newly minted Litecoins. It utilises blockchain technology to record and verify transactions through a Proof of Work (PoW) consensus mechanism.

Scrypt Proof-of-Work Algorithm

Mimblewimble also uses Dandelion technology, which hides any IP address data in a transaction. Litecoin is open source and anyone can submit a Litecoin Improvement Proposal (LIP) on the Litecoin Project Github. These proposals are discussed by the Litecoin community and then accepted or rejected by the Litecoin Core development team which maintains and upgrades Litecoin. Although there were not many other cryptocurrencies around the time Litecoin was created, Charlie highlights that even back then many of them were intended to do nothing more than profit their creators. As such, Litecoin had no pre-mine – Charlie did not keep any Litecoin for himself but did buy and mine some like many others at the start.

Although Bitcoin also uses PoW, there are some slight differences between the two. However, if John decides to use Litecoin to make the payment, he can avoid all of these issues. LTC is Atomic Swap compatible, which means that it can be exchanged for other currencies peer-to-peer without the need for a middleman like an exchange platform. Wherever you choose to buy, enter the dollar (or other currency) amount you wish to purchase. Assuming you are comparing it with Bitcoin (BTC) and Ethereum (ETH), there are several reasons for Litecoin’s price.

What is Litecoin (LTC)?

It is a fully decentralized, open-source, global payment network. Lee developed Litecoin with the aim to improve on Bitcoin’s shortcomings. The broader differences between the two cryptocurrencies are listed in the table below. “Litecoin is the second-oldest cryptocurrency, forked from the Bitcoin protocol in 2011,” says Jay Blaskey, digital currency specialist at BitIRA.

If you’ve heard of Litecoin, you’ve heard of bitcoin and have a reasonable idea of what the whole cryptocurrency scene is all about, but it never hurts to have a quick refresher. It’s not a ‘real’ or physical currency, but it can have real value. That currency can be transferred between users all over the world with low fees and far faster than most traditional currencies. To get crypto into the wallet itself, investors need to use a crypto exchange.

Litecoin also uses the Scrypt hashing algorithm that utilizes much less processing power than the Bitcoin SHA-256 hashing algorithm. Placing a higher emphasis on utilizing high-speed RAM, Litecoin makes it much less possible for a single player (or small collective group of big players) to dominate the mining world. Litecoin’s mining also keeps transaction fees relatively low due to the inherently higher total supply.

  • Litecoin, in order to keep up with the DeFi times, has made it possible to build Litecoin smart contracts since the fall of 2021.
  • “It was engineered to be used for fast, secure and low-cost payments.” Think of it as a Bitcoin spinoff.
  • On October 2023, 1 LTC was worth around $61, making it the 15th-largest crypto with a market cap of just over $4.5 billion.
  • Thus Litecoin’s network can handle more transactions because of its shorter block generation time.
  • Charlie Lee announced in early 2019 that Litecoin would pursue MimbleWimble development, which is underway (as of October 2023).

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