The number of cryptocurrencies in our market continues to grow, so it can be hard to differentiate between them. Litecoin is a type of cryptocurrency, often referred to as (informally) “digital silver,” which is designed for speed and efficiency. This article provides an overview of litecoin, its history, and how you would get involved in the market with this asset as a beginner.
What Is Litecoin?
Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone worldwide. It is based on an open-source global payment network that any single organization or government does not control. With Litecoin, you are your bank.
Litecoin offers fast transactions (about 2.5 minutes) and works globally without needing any central authority. It’s Bitcoin with speed and energy efficiency in mind.
What Is the Litecoin Network History and Features?
The Litecoin network came into existence on October 13, 2011, when its founder, Charlie Lee, a former Google employee, released a client on GitHub. It was a fork of Bitcoin Core’s open source code, and at this time, the Litecoin network went live. It was an instant hit, and Lee added several features still in use today, such as the ability to set the Litecoin client to an initial block reward.
Litecoin’s blockchain is maintained by a network of Litecoin miners – people who use their computers to verify every transaction and add it to the public ledger. These miners are rewarded with newly minted Litecoins for their work.
What Are the Major Differences From Bitcoin?
It is faster (1-minute block generation time) and has significantly lower transaction fees. It allows payments to be processed approximately four times per second instead of once every 10 minutes. The total supply will never exceed 84 million LTC.
How Do You Mine Litecoin?
There are several ways to mine Litecoin, but mining on a mining pool is the most common. These networks allow individual users to group their computer’s processing power to solve complex mathematical equations much faster than a single computer can do all by itself. The rewards are distributed among the pooled participants according to their contribution to the pool’s hash rate.
Litecoin New Features
Litecoin has successfully integrated several features from Bitcoin that were deemed desirable but could not be implemented due to its limited processing power or memory requirements. These include:
1. Segregated Witness
Litecoin SegWit is a proposed update to the Litecoin protocol, whereby transactions can be rounded up to whole blocks without forcing some transactions that might not fit into a block. It has been implemented in most of the significant cryptocurrencies.
2. Lightning Network
Recently, Lightning Network was released on Litecoin, which will make the processing of payments much faster and cheaper. This would be executed through off-chain channels between participants rather than on-chain ones, significantly reducing the risks of blockchain bloat.
3. Confidential Transactions
Another feature that is expected to be added is Confidential Transactions – a cryptographic protocol that hides the amounts being transferred in transactions, making Litecoin more fungible.
How to Buy and Store Litecoin?
The most popular way to acquire litecoins is by buying them on an exchange. Many exchanges offer LTC/USD pairings, some of the most popular being Coinbase, Bittrex, and Kraken. Once you have your litecoin, you can store it in a paper or offline digital wallet. Bitcoin Core and Armory are good options for this – they are available for Windows, Mac OS X, and Linux.
Where to Buy Litecoin?
CoinBase lets you deposit US Dollars or EUR directly to your account using Bank Wire Transfer (Faster Payments in the UK) and Credit/Debit Cards (Visa, Mastercard). These methods are not available in all countries.
Litecoin can be bought and sold on Kraken, with the included currencies being bitcoin, euro, US dollar, and Japanese yen. Funding options include bank wire and SEPA deposits for limited countries only. Cryptocurrency deposits are also accepted, and there is an additional fee for setting up an account on Kraken.
3. Bittrex, Poloniex and Binance
The three other major crypto exchange platforms that offer Litecoin for sale/trade against bitcoins or other cryptocurrencies are Bittrex, Poloniex, and Binance.
4. America’s Bitcoin ATMs
Buy and sell Litecoin at anyone of of our convenient ATM locations.
What Are the Advantages of Using Litecoin?
Litecoin offers several advantages to users and investors, which is why it has gained a following in the cryptocurrency community. Here are some of the main advantages of using Litecoin.
That makes it attractive as a means of payment for daily purchases such as groceries or coffee your Litecoin payments are fast because their transaction fees are lower—they process them quicker than Bitcoin does. While Bitcoin takes 10 minutes per block, Litecoin takes 2.5 minutes per block. This means that your Litecoin payment will go through in about half the time as Bitcoin does.
2.Unprecedented security and privacy
Litecoin’s private, fully-encrypted blockchain cannot be altered or tampered with in any way. It does not rely on trusting some central authority like banks or payment processors to maintain consensus. Instead, Litecoin users store their cryptocurrency keys on their computers and use these keys to authorize payments. This creates a system that offers more security than most other cryptocurrencies.
3.Flexibility and fungibility
Litecoin is also very flexible in allowing users to adjust their block size limit from the default 1 MB to a maximum of 8 MB. This allows for more transactions per second, enables faster transaction speeds, and makes Litecoin more fungible – if you couldn’t guess. This can be helpful for small businesses and large corporations looking to use it as a means of payment or to transfer money across the globe.
4.Transparency and decentralization
One of the main attractions of cryptocurrencies is their transparency – anyone can view how many balance addresses contain, how many coins have been sent to them, and the transaction history. A similar degree of transparency is also enjoyed by Litecoin, which makes it another good choice for businesses and organizations that want to utilize a cryptocurrency while maintaining a degree of privacy.
What Are the Disadvantages of Using Litecoin?
There are several disadvantages to using Litecoin that you should bear before you decide to use it as your preferred payment method. Some common ones are listed below:
It’s accepted by only a small network of merchants and businesses. Despite being listed on more exchanges than bitcoin, it’s not as widely used for payments as other coins. That makes it unlikely to reach Bitcoin’s heights since it has a minor potential use case. This may not be the best choice if you’re looking for an alternative investment to hold over the long term.
One of the risks with investing in cryptocurrencies is that some fluctuate wildly. Litecoin’s price can be very volatile; it often shows a higher level of volatility than Bitcoin, which is why many investors prefer to buy Bitcoin instead. In the long term, that could work to Litecoin’s advantage; if it was less volatile for years, investors might perceive it as a more stable long-term investment than other cryptocurrencies.
How to invest in Litecoin?
There are two ways to invest in Litecoin – buy it or mine it.
Litecoin is a safer investment as you can use cash or a credit/debit card. But the fees are more significant than when you mine it.
You can decide to mine cryptocurrencies solo or by joining a mining pool of other miners (if the pool offers such an option). The reward for mining a block is usually proportional to the output you put in – so the more Litecoin you mine, the bigger your share of the rewards. If you decide to become a miner, be prepared to spend considerable time and energy doing so. Different pools use several algorithms, and the speed at which they mine depends on various factors like hardware efficiency, electricity costs, cloud services, etc.
Why You Should Invest in Litecoin?
Litecoin has been growing strongly over the past year. Even though it is not as popular as Bitcoin, its price has increased steadily. It was initially launched as an alternative to Bitcoin, but now it has become an excellent investment option for cryptocurrency investors. People believe Litecoin will grow in value because it is actively traded, and many people buy and hold this cryptocurrency. It had a major spike in market value after a large exchange (Poloniex) began trading it.
In conclusion, while Litecoin is an alternative to Bitcoin, it’s also a near-perfect investment. With low fees and a high level of security, LTC is an ideal store of value. Most importantly, however, it will not burst like other altcoins that have burst in the past few years. The Litecoin community has intense developer activity, and the developers are committed to making LTC useful for the long term. As a result, we expect Litecoin’s long-term value is likely to increase over the next few years.
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