Litecoin is a form of cryptocurrency very similar to Bitcoin. Both have a lot in common.
In 2011 Charlie Lee, a former Google employee, launched Litecoin on the open source platform GitHub.
It was supposed to be a more modern variant of Bitcoin.
What is Litecoin and how does this cryptocurrency work? Will it be able to succeed in the long run, or will it remain one of many Altcoins on the market? Learn everything you need to know about Litecoin.
One of the oldest
Litecoin is one of the oldest Altcoins on the market. Like other cryptocurrencies it is a global, digital form of payment based on blockchain technology. The crypto currency was founded in 2011 by Charlie Lee. The former Google engineer wanted to create a cryptocurrency that was lighter and therefore more suitable for everyday use than Bitcoin.
The peer-to-peer cryptocurrency is a fork of the Bitcoin core client and therefore has many similarities to Bitcoin. However, the platform uses a different blockchain. This allows a faster transaction speed. The software for creating and transferring coins is open source. The platform is also completely decentralized.
Since it came onto the market, the cryptocurrency has experienced stable growth. With a market capitalization of around US$ 4.8 billion and a current price of US$ 78.37, it ranks 6th in terms of market capitalization. It is considered one of the most popular cryptocurrencies on the market. This can be explained, among other things, by its performance, but also by its functional proximity to Bitcoin.
Differences compared to Bitcoin
Many traders describe the relationship between the two currencies as follows: Bitcoin is gold and Litecoin is silver. And that’s exactly what the developers of Litecoin had in mind when they created the digital currency.
According to Litecoin, it is a clone of Bitcoin. Nevertheless, there are some decisive differences. Some of the most important features are:
- Maximum supply: Many cryptocurrencies have a limited supply. This is supposed to give the currencies an intrinsic value and reduces the inflation rate. At 84 million Litecoins, the upper limit is four times higher compared to Bitcoin.
- Mining algorithm: Both cryptocurrencies are based on the proof-of-work algorithm. Bitcoin uses the SHA-256 algorithm, while Litecoin uses Skrypt. Skrypt does not allow parallel calculations and is therefore a more democratic variant of mining. Skrypt needs less computing power, but uses significantly more memory.
- Transaction speed: A transaction is confirmed approximately every 2.5 minutes. With Bitcoin, the average is every 10 minutes. Therefore Litecoin is able to process transactions about 4 times faster.
- Transaction fees: The Skrypt algorithm significantly reduces transaction costs. The platform advertises with almost free transactions.
Miners are rewarded for their contribution to the network by receiving a reward for each new block they are able to attach to the blockchain. Miners currently receive 12.5 LTC per block. A new block is created every 2.5 minutes on average.
Similar to Bitcoin, there is a block halving. Litecoin performs the Reward Halving after 840,000 blocks and thus also comes to a Halving Event every 4 years. The next one will take place in August 2023.
Will Litecoin Survive?
There are more than 1600 Altcoins on the market. Although Litecoin solves some of Bitcoin’s problems, other cryptocurrencies have managed to do the same. Other crypto projects have earned their niche by taking on a function that could not be covered by Bitcoin.
For example, Ether has established itself by introducing Smart Contracts and making a significant impact on the dApp landscape. IOTA has become a utility token and has many important and forward-looking partnerships. Ripple has entered the market between crypto and traditional banking. A special highlight is still missing.
A glimmer of hope is the active community that is sticking to the project. The cryptocurrency must continue to work on its acceptance and performance in order not to lose the connection.
Since Bitcoin is currently not usable for everyday transactions, Litecoin would have the potential to step in here. As long as Bitcoin has not solved its scaling problem, Litecoin has the chance to establish itself in this niche. But in this niche Litecoin is not alone.
It will be important for Litecoin in what direction it will evolve and in which niche the currency will position itself. In the long term, we see great potential for Litecoin.
Litecoin is among the TOP 10 of the strongest cryptocurrencies on the market and therefore investments in this coin are still a popular investment option.
Bitcoin also has a positive influence on Litecoin. The confidence of the crypto community in the strongest crypto currency Bitcoin (BTC) is still undisputed. Litecoin can score with some advantages over Bitcoin. The transfer process is faster and cheaper.
What is Litecoin?
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