Litecoin (LTC) can be considered as digital silver, considering that Bitcoin (BTC) is gold. The Litecoin LTC cryptocurrency is based on the original source code of Bitcoin and is created to act as a peer-to-peer (P2P) cryptocurrency payment system.
Thanks to its faster transition time, LTC fulfills the role of “digital cash” much more efficiently than the leader BTC (at least for now). Currently, Bitcoin is considered more as a store of value, while Litecoin is better suited for general purchases and daily transactions.
Cryptocurrencies are the payment method of the future, and they are the most popular digital asset of the moment. That is why speculation and scam go hand in hand with the cryptocurrency market.
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Are you interested in investing in Litecoin (LTC)? In this article, we will explain what this crypto active is about and how it works. We hope it helps you decide!
Litecoin LTC: What is it
Litecoin is a cryptocurrency considered to be the first successful altcoin. The launch of Litecoin in 2011 inspired countless developers to try and expand the crypto user base by altering the code of Bitcoin and using it to launch different networks.
While Lite was not the first cryptocurrency to copy Bitcoin’s code and alter its characteristics, it is one of the most important (historically speaking). However, LTC was not only slightly modifying the Bitcoin source code, it was also creating several revolutionary features, such as the Lightning Network and Segregated Witness.
Rather than acting as a competitor to the pioneering cryptocurrency, Bitcoin BTC, Litecoin positioned itself as a friendly crypto asset with slightly different goals.
Litecoin LTC: How it works.
Litecoin shares many characteristics with the largest cryptocurrency by market capitalization: BTC. However, the two cryptocurrencies, although they have a lot in common, are not the same.
Like Bitcoin, LTC is an open-source blockchain that uses a proof-of-work consensus mechanism, allowing its users to dedicate computing power and earn Litecoin in exchange for verifying blocks. Although the consensus mechanism is the same, the algorithms used to validate blocks are completely different. While Bitcoin uses the Secure Hash Algorithm (SHA), Litecoin uses a consensus algorithm called Scrypt.
Aside from its algorithm, LTC differs from Bitcoin in two main ways: its total supply and its block production rate. LTC increased the speed at which blocks are solved by four times that of Bitcoin, while also increasing the supply four times, to 84 million.
Founders of Litecoin LTC
Litecoin has been closely associated with its creator, Charlie Lee, since its inception.
Charlie Lee is a computer scientist and graduated from the Massachusetts Institute of Technology (MIT).
Before creating Lite, Lee worked at the giant Internet company Google. He later joined cryptocurrency exchange Coinbase as its Director of Engineering in 2013.
Once he joined Coinbase, Lee put aside the development of Litecoin for a period, and after Coinbase he resumed his development full time, this was in 2017. He now holds the position of Managing Director of the Litecoin Foundation, a development team working on the project full time.
Litecoin LTC Vs Bitcoin BTC
Although its code originates from Bitcoin, Litecoin is a cryptocurrency that has a purpose of its own. It acts as a faster and lighter version of Bitcoin, rather than trying to be its competition. On top of that, Lite has a dedicated development team working to improve the network, and many of the network updates they created ended up being used on the Bitcoin network (such as SegWit and Lightning Network).
Litecoin LTC value
Litecoin is scheduled to have a finite supply of 84 million LTC. Like Bitcoin, Litecoin also reduces the block rewards that miners receive during their ‘halving’ events, effectively reducing the speed at which new coins are brought to market.
Due to its predictable and finite supply, Litecoin is considered a scarce asset and therefore derives value (in part) from its scarcity.
The other parts of the equation that add value to Litecoin are its stability and the size of its network (in both mining and buyer/seller terms).
How Litecoin is protected
The LTC network is protected by its network of miners. Because it is a decentralized cryptocurrency, everyone can participate in the block validation process. When it comes to the possibility of security breaches, people usually think of 51% of attacks. Litecoin developers take security issues very seriously and are known for not compromising them. Thanks to its vast decentralized network of participants, coupled with the efforts of its developers, LTC is unlikely to succumb to these types of malicious network attacks.
How to use Litecoin
With its transactions essentially acting like Bitcoin’s, only faster, its biggest potential use case is for payments that are too small and/or too time-sensitive for the Bitcoin network.
At the moment, Litecoin is supported in several thousand stores and businesses around the world, and transacting with it is fast and cheap.
Conclusion
LTC is the successor to Bitcoin, we could compare them to silver and gold. LTC opts for faster and cheaper payments while allowing BTC to handle large transactions. Its development team led by Charlie Lee has brought many groundbreaking discoveries to the world of cryptocurrencies.
Litecoin is undoubtedly one of the cryptocurrencies with the most potential, and one that is already proving that it has a use case in the real world.
Knowing the characteristics of financial markets, and their components is the most valuable asset we can have. In this way, we will know better where to place our investments and avoid scams and deceptions within the system.
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