Welcome to Crypto 101: What is Litecoin? I am sure that many of you have heard of Bitcoin, but have you heard of Litecoin? Litecoin is a cryptocurrency similar to Bitcoin that had its launch back in late 2011 by a former Google and Coinbase engineer, Charlie Lee. The coin works in similarity as Bitcoin but operates at a higher supply and faster transaction speed.

Litecoin

Like Bitcoin, Litecoin is a decentralized currency that is free from censorship and open to the public. The currency operates on a peer-to-peer network on Litecoin’s own blockchain, one of the largest global scrypt networks. The network transacts billions of dollars and has been operating with 100% uptime ever since its initial release in 2011. Unlike the traditional fiat currency, the supply of litecoins is set, there will ultimately be 84 million litecoins that they introduce into circulation. This supply is quadruple of Bitcoin’s total supply. 

How does Litecoin Work?

In order to create Litecoin, Lee actually uses the Bitcoin codebase. Lee hopes Litecoin will be the “digital silver” to Bitcoin’s “digital gold”. This is why the two currencies are so similar to one another and functions similarly.

How Litecoin Works
  1. Like Bitcoin, Litecoin requires miners to consistently mine for new blocks. Miners are required to solve difficult computational problems in order for a block to be successfully verified. The incentive for mining comes with the reward given after successfully verifying a block. As time passes and the blocks continue to be mined, the number of Litecoins that will be rewarded for completing the task will decrease. *Note this is known as “Halving”
  2. Once they solve the problem, the first miner to solve the problem will have to go through a Proof of Work (PoW), where other miners have to check the accuracy of the problem. This prevents the possibility of “double-spending” in the Blockchain.
  3. After verification by PoW, the transaction records on the Blockchain and they transfer all rewards to the miner’s wallet.
  4. Later when a user wants to purchase a Litecoin, they can find miners or others who hold Litecoin to purchase Litecoin from them.
  5. The two can then exchange their currencies.
  6. Once the transaction goes through, it records on the Blockchain where everyone will be able to view.
  7. The transaction will be available to all participants on the Public Ledger, where it is kept transparent and public to all.

Is Litecoin secure?

In terms of storing Litecoin, the security is dependent on what type of storage device you use. Cold wallets are often times more secure than digital wallets as it is less susceptible to hackers.

However, this would come at the expense of ease as digital wallets can just be on your phone and is easily accessible. Hence, the storage for Litecoin is dependent on the user.

Check out our article on ways to store your coins to learn more! 

Litecoin security

How do you Mine for Litecoin?

Litecoin is similar to Bitcoin when it comes to the process of mining. It requires the miners to consistently mine for new blocks through solving computational problems. As they process and add more transactions onto the blockchain, the difficulty of the problems will also increase. It is also important to note that Litecoin and Bitcoin use two different mining processes. Litecoin miners use an algorithm they call Scrypt whereas Bitcoin miners use the SHA256 algorithm.

With the Scrypt algorithm, Litecoin miners are able to mine for Litecoin using less expensive hardware. While Bitcoin miners have to use expensive ASIC hardware, Litecoin miners can use GPUs and CPUS which are much cheaper for miners. This provides much more accessibility for users wanting to mine Litecoin and also allows for decentralization in terms of mining. 

*Litecoin halving occurs every four years or every 840,000 blocks until it reaches the maximum supply of 84 million Litecoins in the network. Halving results in a 50% reduction in mining rewards which will in result slow down the rate at which new coins are created, hence lowering the available supply of the currency. As of right now, roughly 75% of Litecoin’s supply has been mined.

How much is Litecoin worth?

  • litecoin
  • Litecoin
    (LTC)
  • Price
    $57.79
  • Market Cap
    $3,798,426,295.00

Similar to Bitcoin or any currency, the value of Litecoin is only as valuable as what society perceives it. The creators of Litecoin created the coin also to hedge against the financial systems. With the government systems continuing to print out more and more money, the value of currencies will eventually fall. Litecoin is able to erase people’s fear of overproduction of the currency as the currency has a limit to its supply. The value of the coin is currently at 44.91 dollars, at the time of writing.

Litecoin is one of the top 3 cryptocurrencies in the crypto space and has a market cap of close to ~3 billion. Given the currency’s fast transaction speed and low transaction costs, the currency has gained lots of popularity. The currency has also partnered with UFC becoming one of the first ever cryptocurrencies to sponsor UFC. It should not be a surprise to see more cryptocurrencies becoming adopted by the masses as people better understand the uses of the currency.

Litecoin vs Bitcoin

Litecoin vs Bitcoin
*Note: transaction costs for Litecoin and Bitcoin are usually taken in LTC or BTC

As you can see that the Litecoin is, more or less, an upgraded version of Bitcoin. The two are relatively similar in many ways, but Litecoin does have a higher supply, faster transaction speed, lower transaction costs, and more accessibility when it comes to mining. However, we cannot deny the dominance of Bitcoin as the de facto standard of cryptocurrency holding the majority of the market shares in the crypto space.

How can you acquire Litecoin?

There are a few ways where you can purchase Litecoin. It can be bought in an exchange like Binance or FTX or it can be bought at OTCs like Genesis Block. If you would like to trade with us or have any inquiries regarding digital assets, feel free to reach out to us.

That will sum it up for Crypto 101: What is Litecoin? If you have any questions feel free to leave a comment below!

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