What is Litecoin, Meaning, How Does it Work, Benefits and More: Latest Update>>>>>> Litecoin is a cryptocurrency that came into existence in 2011. Like the popular cryptocurrency Bitcoin, Litecoin is also based on an open-source global payment network that is not controlled by any central governing authority. This article will provide you with more information regarding Litecoin including its meaning, benefits, features and more.
Litecoin (LTC) was founded in 2011, two years after the inception of Bitcoin. Litecoin can be used for paying people anywhere in the world without an intermediate agency to process the transaction. Similar to other cryptocurrencies, Litecoin is also a decentralized system, that is not issued by any government. Litecoin are created by a cryptocurrency procedure called mining, unlike traditional currencies that are regulated by a Central bank and coming off the press at the Bureau of Engraving and Printing.
What is Litecoin, Meaning, How Does it Work
Litecoin was launched as an alternative to Bitcoin and was commonly called “the silver to Bitcoins’ gold”. As measured by market capitalization, Litecoin is the 14th largest cryptocurrency in existence. The most important difference between Litecoin and bitcoin is the use of different cryptographic algorithms. While bitcoin employs an SHA 256 algorithm, Litecoin makes use of a comparatively newer algorithm called Scrypt.
Litecoin prioritizes transaction speed which is exactly why it gained popularity. Litecoin takes roughly 2.5 minutes per transaction while bitcoins take almost 9 minutes. Therefore, Litecoin network can handle more transactions. But Bitcoin has significantly higher market capitalization compared to Litecoin. The value of Bitcoins in circulation is estimated to be one trillion dollars and the value of Litecoin value is capped at $12 billion. Both these digital currencies have a fixed supply system. Bitcoin has a supply of 21 million and Litecoin has a fixed supply of 84 million coins.
Genesis of Litecoin
Litecoin was founded by Charlie Lee, a graduate of the Massachusetts Institute of Technology. He was a former Engineer at Google. Lee joined coin base in 2013 and took up the role of Director of Engineering. However, in 2017 he left the company and worked solely on Litecoin. He later declared that all Litecoin would be sold and donated, while Litecoin was trading at its all-time high rate of $350. Initially, Litecoin was established as a strong competitor for Bitcoin. But the cryptocurrency market has been highly saturated since then and the popularity of Litecoin decreased.
Mining of Litecoin
Litecoin is a peer to peer (P2P) virtual currency. The mining of cryptocurrency requires a huge amount of processing power. The CPU of personal computers is usually not fast enough for cryptocurrency mining. But Litecoin is made in such a way that it can be mined using personal computers. The miners are awarded Litecoin for participating in the act of mining. The amount of Litecoin rewards is divided at certain intervals and this is called Litecoin Halving. The last halving was done on August 5, 2019 and the next is expected to be on August 23, 2023.
There are two types of consensus mechanisms:
Proof of Stake
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The miners solve cryptographic puzzles using their computing power to mine cryptocurrency. If the puzzle is hard or challenging enough, the entire bitcoin supply will be accessed by very few.
Choosing a wallet
Litecoin can be stored in a variety of wallets. One can choose what wallet to use depending on the security and functionality. The Krypto mat exchange is a secure and safe way to store Litecoin. This wallet helps you with a wide range of functions like buying, selling and exchanging for other currencies.
How is Litecoin value determined?
There will only be 84 million Litecoin in circulation. In November 2021, there was a total of 69 million LTCs in circulation which means that there are just 15 million Litecoin left for miners.
This makes Litecoin a scarce resource and hence valuable. The block rewards are also decreased in number due to the halving event and this also adds to the increased value of the coin.
To conclude, we can say, Litecoin is a reliable digital currency that can be used to transfer funds which are exponentially faster than Bitcoin. Litecoin is not a universally accepted currency as of now. But once the currency reaches the critical mass of users, and provided the currency can hold its market value, LCs can be used as a method of payment. Litecoin shows good potential in the digital currency realm to emerge as a standard currency.