We answer some commonly asked questions while demystifying the myths and misconceptions about Litecoin.
What is Litecoin?
Litecoin is a cryptocurrency founded on Bitcoin’s ideas but running on a different mining algorithm. Litecoin was created to improve shortcomings such as slow transaction processing speeds and mining dominations that Bitcoin seemed to have. Litecoin has grown to be used in everyday payments, enabling instant, near-zero-cost transactions worldwide. It is an open-source, global payment network that is entirely decentralized without control from any central authorities.
Who invented Litecoin?
Litecoin is a creation of Charlie Lee, who was trying to technically develop Bitcoin by increasing the generation of new blocks to at least every 2.5 minutes instead of 10 while using the crypt as the hash function. While the first tweak makes transactions faster, the second makes mining reachable to anyone without specialized hardware. Currently, Litecoin is maintained by the Litecoin Foundation and has been decentralized and released as an open source.
What is Litecoin used for?
Generally, Litecoin is used for everything money is used for, such as selling, buying, and donations. The coin, however, can extend its usage to more transactions than fiat currency. Moreover, it can be used to accept payments globally or ease cross-border commerce without being shut down by authorities or the banking system. Additionally, it can be used as a store of wealth immune to confiscation or freezing.
Is Litecoin a blockchain?
Litecoin transactions are records of balances transacted amongst addresses. Blocks are one Mb groups of Litecoin payments for easier verification and moving across the network. Litecoin generates new blocks at a fixed time interval of 2.5 minutes and each block is connected to the other chronologically preceding it by a cryptographic hash. When the block is verified, it is disbursed to the other nodes as a peer-to-peer shared file.
Why does Litecoin have value?
Litecoin has a higher value compared to conventional currency. This is because it is anonymous, irreversible, decentralized, cannot be devalued or confiscated, and can be moved over the internet to anywhere worldwide in seconds. These aspects make the coin appealing, and its scarcity makes it even more valuable. Moreover, Litecoin is valuable since it fulfills all the requirements of money: a store of value, a unit of account and a medium of exchange.
How many Litecoin coins are there?
Currently, the maximum supply of Litecoin is restricted to 84 million. The main reason for this is halving (the return for mining Litecoin coins is reduced by half every four years). In this case, 840,000 transaction blocks are processed every four-year halving phase.
The first return for miners was 50 coins per block. After the first halving, they were 25 and 12.5 4 years later. So, the cycle keeps reducing by half. All the block returns will ever be there, adding up to 100. As such, 840,000 X 100 is 84 million.
How is Litecoin mined?
Litecoin is mined by solving complex mathematical problems known as hashes to earn the correct record of new transactions to the blockchain. However, the blockchain cannot be changed once a block is closed. The first miner to solve the hash associated with a transaction through the proof of work consensus mechanism is rewarded 12.5 Litecoin coins. Regardless, Litecoin mining operations are pretty complex and solving the hashes requires immense computing power, which requires substantial space and energy. As a result, the most significant share of Litecoin mining is done by established mining firms and pools of crypto miners using high-tech hardware.
How does a Litecoin ATM work?
The Litecoin ATMs allow customers to purchase Litecoin coins by inserting traditional currency like a vending machine or sending Litecoin to withdraw traditional cash. The former is referred to as “1 way” ATMs while the latter is known as “2 way”. Litecoin from a trusted manufacturer and operator should be safe to use. However, different Litecoin ATMs feature additional AML/KYC requirements.
What is the Litecoin network? How does the Litecoin network work?
The Litecoin network is a decentralized connection of peer-to-peer nodes that works by processing transactions and recording them on the blockchain. Anyone with internet connectivity and a computer can quickly join the Litecoin network by operating a node. Any node can process transactions into blocks that are added to the final blockchain by consensus of the complete network. However, voting power is determined by the hash power and the capacity to complete proof of work.
How much is the Litecoin transaction fee?
A Litecoin transaction fee is the cost of having transaction data included in blocks added to the blockchain permanent record that fluctuates under market demand and supply. It is worth noting that the highest transaction fees are slightly over a dollar while the lowest is pennies. Factors such as the hardware capacity, competition between miners, and the number of simultaneous transactions competing to be added in a block also affect Litecoin transaction fees.
How many confirmations for a Litecoin transaction?
A complete transaction in Litecoin takes about 2.5 minutes. The latest blocks in the blockchain are changeable unless additional blocks are added after them. For irreversibility, 6-12 levels of blocks are required, which means that 6-12 confirmations are needed. The latest block to be added to the blockchain is changeable. If several other blocks are added, however, the part of the blockchain is considered immutable.
Who accepts Litecoin? Where is Litecoin accepted?
Many online merchants accept cryptocurrencies as payment. Web Hosts and Domain registrars accept crypto as payment while charities like Wikipedia accept donations in crypto. Moreover, some large brick-and-mortar stores and local restaurants are starting to take crypto as payments. Besides, bitni.com receives Litecoin and converts it into different fiat currencies.
What is a Litecoin wallet?
A Litecoin wallet stores user Litecoin addresses. When the sum value of all the addresses in a user’s wallet is automatically added up, it becomes the total balance of the wallet. While storing the user’s wallet in centralized exchanges is risky, non-custodial exchanges such as bitni.com are much safer since they don’t hold the user’s wallet.
Can I buy Litecoin without ID?
Most centralized exchanges have a stringent requirement for identification, such as a requirement to upload a scanned passport or other government-issued documents. Decentralized exchanges, such as Litecoin, however, often have less strict requirements for identification, especially if the transaction is in-person. In non-custodial exchanges, such as bitni.com, for instance, you do not require identification for crypto-to-crypto swaps. If you want Litecoin without SSN, then this is the right place.
How to get Litecoin?
You can easily buy and sell the coin on exchanges. For instance, you can get Litecoin from the centralized exchanges store, but you need to have an ID. In contrast, decentralized exchanges (DEX) provide peer-to-peer buying and selling of coins between users and can quickly be done in person or online. For non-custodial exchanges, such as bitni.com, you can promptly access Litecoin coins by swapping cryptocurrencies even without signing up.
Why is Litecoin the future?
The primary reason why the cryptocurrency is the future is that it is better. Litecoin has significantly improved over fiat currency and precious metals since it can be wired over the internet within minutes. Should the central banks continue destroying the value of conventional currencies, then cryptocurrencies will advance to become more significant to the future of money.
Can I get Litecoin with verification or KYC?
KYC or the know your customer policy is a verification requirement. Most governments have become increasingly authoritarian towards cryptocurrency and aim to crack down on anonymous trading by requiring a customer to upload documents proving their identity. Most exchanges have caved into the pressure from authorities and currently have KYC policies. Centralized exchanges have always had KYC while decentralized exchanges like bitni.com do not need users to have KYC for crypto-to-crypto exchanges.
Can Litecoin Crash? Will Litecoin crash?
If Litecoin was going to crash, it would have done it already. Since it is new and the internet has been awash with speculations since its launch, the coin has gone through wild price fluctuations. Notably, however, there have been wild fluctuations in prices with other commodities, such as oil. Litecoin’s lowest fall after its all-time high of several hundred dollars is still in the scores of dollars. So, for Litecoin to crash to $0, the demand would have to be zero or the supply would need to be infinite, which is a highly implausible situation.
Is Litecoin a good investment?
The value of original Bitcoin has steadily gone up from pennies to thousands of dollars within a decade. It has blown away the stock market, gold, and other precious metals and out-performed much of any other investment. Even though Litecoin is yet to reach Bitcoin’s high level, it has performed pretty well since it has gone from pennies to several hundred dollars at its high, thus making it a relatively good investment.
Can Litecoin be Hacked?
The Litecoin network is not vulnerable to hacking. To enhance its security, the blockchain is decentralized across thousands of independent nodes. Besides, if any node is hacked, it will not compromise the others. It is worth noting, however, that centralized Litecoin exchanges are constantly hacked. As such, you should always use a non-custodial exchange, for all your Litecoin exchanges.
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