Litecoin (LTC or Ł) is a peer-to-peer cryptocurrency and open source software project released under the MIT/X11 license. Creation and transfer of coins is based on an open source cryptographic protocol and is not managed by any central authority. The coin was inspired by, and in technical details is nearly identical to, Bitcoin (BTC).
With an influx of money from various investors and institutions, alternative cryptocurrencies or altcoins are under scrutiny as traders diversify themselves from Bitcoin. Among the most prominent options is Litecoin.
Litecoin is built on a decentralised open source network. It is a peer-to-peer digital currency. During its inception, the main objective was to create a currency ‘second’ to Bitcoin. Though the technology is inspired from that of Bitcoin, yet with a few modifications.
Made in the image of Bitcoin in its early days, many considered LTC as a clone. Yet, it has technical differences that separate it in the eyes of many. It has been increasingly highlighted because of its speed. According to the results of some tests conducted, where a user compared the speed of coins being transferred from an exchange to a wallet, Litecoin turned out to be the best performer. They could transfer 23 coins in 10 seconds. Thus it drew huge attention from businesses, that are now looking forward to adopting LTC in their work systems. In a latest run, a tested version of LTC was used to purchase coffee at Starbucks without any additional fees. It turned out to work better than any other payment option.
(Caption : Litecoin) (Source : https://goo.gl/images/gb8Jtb )
With its inception in 2011, it is already creating tough competition at the top of the cryptocurrency table.
The history of Litecoin
It was a time when Charlie Lee, a normal google employee used to shuffle his time around overhauled YouTube and Chromebook projects and in the rest of his time, used to ponder his interests in cryptocurrency. In a time when Bitcoin had plagued the network with congestion and unsustainable fees for simple transactions, Charlie stood up to create a change.
Over the course of a few months, he became better at cryptocurrency with his experiments in creating a second generation of coins. ‘Fairbrix’, which eyed security enhancements or ‘Tenebrix’ that looked for equitable distribution of coins are a few of his initial efforts. However, on 13 October 2011, took birth Litecoin. The approach behind it was to have no pre-mined coins for any developers, rather putting a cap on total number of coins that could be lended. The main attraction towards it was unarguably the drastically low transaction fees.
Litecoin was launched as the ‘silver’ of cryptocurrencies. Coinbase, to which Charlie Lee was an ex-employee, became of the first exchanges to list LTC alongside Bitcoin (BTC) and Ethereum (ETH). Currently Litecoin is the fourth largest cryptocurrency in the world on the basis of market capitalisation. The limit of the number of coins is set at 84 million, that is, there can be no more than 84 million Litecoins in existence ever. It is designed to be faster than Bitcoin, with the capability of producing four times more coins in a particular interval. Hence it becomes much more easily obtainable and transactable.
It was first released as an open source client on GitHub. The network went live on 13, October 2011. It differed from the existing system by producing a client with a decreased block generation time, increased number of maximum coins, different algorithm for hashing and a modified GUI as well.
Litecoin uses Scrypt as its working algorithm which is a sequential memory-hard algorithm that requires asymptotically more memory than a non-memory-hard function, unlike the existing SHA-256 algorithm during the time of its launch. The purpose of Scrypt is to provide miners the freedom to mine Litecoin and Bitcoin simultaneously. Moreover, the idea behind it was to give ASIC miners, GPU and FPGA devices an edge over CPU miners. This brought great interest in people towards LTC and during the month of November 2013, Litecoin version 0.8.5.1 was released. This included vulnerability fixes and enhanced security features. The digital currency experienced extreme growth and in the coming December, the developer team launched the 0.8.6.1 version which was an effective version with lower transaction fees. This version also improved performance and security to a greater extent. In addition, it ensured that low fees transactions which were delayed by earlier versions. The aggregate value experienced massive growth which included a 100% leap. It had already reached a $1 Billion market capitalisation at that time.
The most prominent aspect of Litecoin is that it holds the most potential for disruption and puts much more confidence in the community through its transaction system. As soon as the Segregated Witness (SegWit) was released, a proposed blockchain upgrade allowed speedier off-chain transactions. Litecoin was the first to support it and the first to integrate it too. May 2017 turned out to be the time when Litecoin made entry into the top 5 cryptocurrencies by adopting SegWit. Later in the same year, the first Lightning Network transaction was made using Litecoin that transferred 0.00000001 LTC from Zurich to San Francisco in one second. In February 2018, Alza.cz—the EU retailer, began accepting Litecoin as a payment method. The ease of transactions with LTC makes eCommerce one of the most suitable options for adoption. It has been adopted by BTCTrip, Bitify, AllThingsLuxury, Bitcoin.shop and Overstock.com have pitched in.
Moreover, platforms like Bankex have accepted Litecoin as many customers exchange their cryptocurrencies for Litecoin in anticipation of a transaction. Currently, Ethereum is the highest fundraiser, but Litecoin is likely to become on of the top three on the Bankex token sale list due to its rapidly broadening and affordable transfer prices.
With the improvement in technology over time, Litecoin has effectively resulted in increasing number of transactions with reduced number of bottlenecks.
How does Litecoin Work?
If you are only interested in owning Litecoin, you can buy it from exchanges such as Coinbase. On the other hand, if you want to take a dig at mining and you have the resources to do so, Litecoin could be a fair choice to put your fortunes into.
Litecoin mining depends on your hardware, software, operating system and pool. You need to figure these variables out before you get into LTC mining.
Is LTC mining worth the time?
Litecoin mining is the process by which the blockchain is maintained. Blockchain is basically a ledger for all the transactions ever made on the LTC network. Miners can see the transaction data by the various other miners since the last block was found. These transactions are assembled in the form of Merkle trees inside a block. Once the data is assembled, a hash is calculated for the block.
A hash is a function that converts the input numbers and letters into a fixed length encrypted output. Basically it spits out a string when the details in the data are run through certain algorithms. It is essentially created for blockchain management in cryptocurrency using some algorithms. A given dataset only returns one hash, and the miners look for a valid hash—one that starts with a long string of zeros. The one who gets it, wins the newly created coin and their block is added to the blockchain. These algorithms are implemented on a chunk of data and it serves the purpose of ensuring that the data is not tampered with. Every block contains the previous block’s hash. Hence, the network can know if there is someone who is trying to insert a vague transaction anywhere in the blockchain. So the security is much efficiently ensured.
(Caption : A general mining setup) (Source : https://goo.gl/images/3VyTP3 )
Miners must run these has functions again and again. The reason behind do so is that for creating a lot of hash power, an attacker would have to spend some coins, then add a hug number of spam transactions over it so that it is difficult to discover and do not reference to the attacker’s spend. In this way they would have to spend their coins to earn them, which is known as a double-spend attack. But the network is required to go through millions of hash function which creates a lot of work. And undoing it in this way would prove to be very expensive. This helps the mining community as for the attackers, mining becomes way too expensive to for an attack.
A little over seven years, and Litecoin has demonstrated this kind of perseverance power which other crypto-alternatives have failed to do.
Currently, Litecoin’s price is around $140 and has fallen from $420 in December 2017. But it is certainly much higher than the $4 level which LTC was trading around the start of 2017. It has shown a growth of around 5,800% throughout the year. According to BitInfoCharts, the transaction fees is $0.25 which is much lower as compared to Bitcoin’s $11.30. With a new block mined every two and a half minutes, Litecoin transactions are much faster in gaining confirmations.
Even though Litecoin is way far from scaling the way of centralised payment systems, yet the claim to become the ‘silver cryptocurrency’ does have some merit to it.
How about buying LTC?
You would need to store your Litecoin in a place called wallet. There is a range of options at your disposal depending on choice of security and convenience. The best option is probably the Litecoin Core client which will take up around 15 Gb of space, since it downloads the entire Litecoin blockchain. Adding to your benefit, it is possible to move these files around so you can store them on a hard disk, unlike Ethereum. It is the most reputable and secure software for Litecoin. It can be used to send and receive Litecoin which makes it relatively convenient. If it is kept synced with the network, it keeps you updated with the latest updates in the blockchain as well.
However, if you prefer security, it is better to go ahead with cold wallets or the ones that never get connected to the internet. People who deal with large sums of cryptocurrency usually end up generating key pairs on computers. Others use paper wallets, where key
(Caption : Think about Litecoin) (Source : https://goo.gl/images/YthpG8 )
are stored in physical forms like QR code or strings of numbers and letters. Some even use “brain wallets”. That requires remembering a series of random “seed” words that can be used to re-create private key.
Remember, exchanges keep your private key with themselves, hence you might legally control your Litecoin, but you cannot move it. You must ask the exchange to do so.
Should I invest in Litecoin?
Litecoin does have a strong design perspective. But, ultimately the participants are benefiting themselves from the growing adoption of Litecoin in ecommerce. As one of the top cryptocurrencies, it is quickly becoming a contender for the top three spots. With the inclusion of Litecoin in platforms like Bankex, the attention gained has grown. Along with the appeal generated from its design and platform, its trade alongside Bitcoin and Ethereum is certainly giving Litecoin a push. Most enthusiasts have compared the market capitalisation of Litecoin with other cyptos and stated that it is undervalued or underrated. With its fast growth and faster transaction capabilities, it does grow a large amount of interest in today’s crypto world.
Also Litecoin’s mining algorithms are simpler than those of Bitcoin, meaning it can be mined on computers and there isn’t a need of buying expensive hardware to proceed. LTC mining even takes much less energy. Considering the world taking is up mining in massive amounts, there is already a shortage of powerful graphic cards that are needed to proceed. This could prove to be an advantage for Litecoin miners as it can be mined even on CPUs.
Hence, all the key differences put an inclination towards Litecoin when it comes to investments.
Litecoin vs Competitors
Well, the major competition that Litecoin faces in the market is from
The biggest cryptocurrency in the world, which has stationed its positioned at the top from the beginning of cryptos, is a competitor to Litecoin with the latter’s basic foundation being laid as of the former’s shadow. Hence, that instinct of competition always exists between the “gold” and the “silver” of cryptocurrencies.
The second largest cryptocurrency in the world which has shown remarkable growth after they opened an ICO. Subsequently it has grown to become the crypto with second largest market cap. With improved technology and implementation of ERC20, Ethereum does appear as a big competitor for Litecoin.
The cryptocurrency with the highest growth ratio, Ripple has made its ground in the top 5 cryptos with a remarkable implementation of technology. The Ripple network has certainly opened the bounds for cryptocurrency applications. Hence it does become a major competitor in the race towards the largest cryptocurrency in the world, having surpassed Ethereum twice already in the past few years.
Litecoin is a less dramatic community that ends up giving it a less volatile and steady flow, making crypto enthusiasts excited about investments in LTC. With much progress being made on the Lightning Network and the inner LTC system, Litecoin might one day evolve into the most efficient and truest form of cryptocurrency yet.