What is Litecoin and the way does it work?

Charlie Lee, the founding father of Litecoin had recognised the good potential for cryptocurrency within Bitcoin. However, he also noticed some inherent limitations during this new, pioneering digital asset. Bitcoin was relatively slow to transfer and too expensive to use routinely as a way of transaction. Lee understood that these weren’t desirable traits during a currency.Lee designed Litecoin to supply more blocks than Bitcoin and for it to possess a better maximum supply. As such, it might be faster and even be more readily available than Bitcoin.

The digital currency has struggled with making inroads into Bitcoins popularity, with it being difficult for several people to ascertain past Bitcoin since it had been the primary of its kind. However, because the technology behind blockchain evolves, there’s potential for several people to become frustrated with Bitcoin’s comparatively slower speed and costlier transaction fee. Potentially seeing Bitcoin become more of a store useful as against an option for low value, everyday payments.

How does Litecoin work and what technology is behind it?

Due to Litecoin having a block confirmation time of two .5 minutes, its transactions are much faster than Bitcoin which takes around 10 minutes. Each transaction between two parties is then recorded on one among the blocks of the chain.Litecoin is made upon an equivalent fundamental as Bitcoin. Both BTC and LTC are often mined and as a result, orphaned blocks can occur. Orphaned blocks are created when two miners mine a block at roughly an equivalent time, both blocks are initially accepted by the chain but afterwards, one block is rejected. It makes use of Segregated Witness (SegWit) to scale back the proliferation of orphaned blocks created by its low block confirmation time.

Another Litecoin technology is Atomic Swaps, which provides interoperability to the blockchain, allowing the exchange of various cryptocurrencies without actually having to travel through an exchange.

Is Litecoin real money?

It’s intended purpose is to be used as an everyday digital currency. It’s speed and comparatively low fees attest to the present. Its predecessor, Bitcoin, is drifting ever further faraway from being practical in use for smaller purchases and as a result, is heading more towards being a store useful for investment.Bitcoin is comparatively expensive and slow to manoeuvre around, whereas Litecoin was designed and has been improved to form it cheap and fast, and better positioned for everyday use. As such, with more websites and corporations accepting LTC as a sort of payment it might be considered to be ‘real money’, instead of just be a vehicle to manoeuvre value between world currencies.

Fees & Expenses

At the time of writing, the typical transaction fee stands just above $0.01. this is often a minuscule amount when considered next to the share fees employed by Mastercard companies, banks and PayPal to manoeuvre money across borders.When purchasing Litecoin through a web exchange platform, a little fee also will be charged by the for completing the transaction. for instance, on Coinbase purchases from 0-$200 dollars will have a fee that scales from $0.99-$2.99 and open-end credit transactions will have a 3.99% fee too. Whereas CEX.IO will charge a 7.5% transaction fee.

Benefits of Litecoin

Speed – Transactions are fast, taking over average around 2.5 minutes, which is fourfold faster than Bitcoin which takes around 10 minutes. It achieves this by its faster block processing times.Cost – LTC is reasonable to use for transactions, especially in comparison to the regular costs for Paypal, credit cards or wire transfers. Even compared to Bitcoin whose average transaction fee is around $3 at the time of writing, Litecoin is incredibly cost-efficient.

Faster block generation – Every 2.5 minutes a block is mined and 12.5 coins are generated, as of your time of writing (May 2020), subsequent Litecoin halving will happen in August 2023. this suggests that there’s more LTC to travel around. If you’re an aspiring miner, there’s a better chance of you being rewarded for your mining efforts than with other certain currencies.

Interoperability – because of the Atomic swap technology, Litecoin are often exchanged to other currencies without having to travel through an exchange thus saving you money.

Decentralised – LTC transactions are validated by the community and therefore the record is stored on the blockchain. As a result, there’s nobody central authority controlling Litecoin.

Can Litecoin be used anonymously?

The record of each transaction between parties will always be stored within the blockchain. However, it would, of course, be possible to use an alias. The record of every transaction does contain a numbered wallet address, from where the coins were stored, however, these are extremely difficult to trace to anybody individual. As such, LTC does provide a high level of privacy, but it’s important to recollect that it’s not completely anonymous.It should even be noted that if you’re using one among the larger and more official exchanges on the web you’ll have had to submit some sort of photo ID so as to shop for and sell cryptos. As such, when using these exchanges there’s no anonymity concerning your transactions. Such regulation is useful, however, because it protects both parties involved.

How safe is It?
Litecoin features a number of the way during which it helps to make sure the security of its coin holders. for instance, it protects against ‘Flood Attacks’, where spammers would aim to crash the network employing a multitude of small transactions. It achieves this by making it financially impractical to hold out such an attack. It charges a private fee for every transaction, regardless of how small, thus making such attacks potentially expensive endeavours.

The use of SegWit technology also helps to stop malleability attacks on users transactions. Segwit works by taking signature data out of the transactional record, which prevents it from being accessed by hackers.

It should be noted that Litecoin’s network has never suffered an attack, nor has it been hacked through an exchange. A testament to the measures it’s put in situ.

What teams are performing on Litecoin?

The Litecoin Foundation may be a development team who work on the digital currency. Their stated goal is to ‘Advance Litecoin for the great of society by developing and promoting a state of the art blockchain technologies’. they need to be partnered with a variety of companies to assist further integrate Litecoin use into society. Such as, partnering with BitcoinRewards to assist people to earn LTC from online shopping, also as Meconcash to facilitate fiat withdrawals from LTC ATMs across South Korea.The Litecoin Core Development Team are the most developers for the coin itself and that they add tandem with the Litecoin Foundation, who also provide the core development team with support.

Atari partnered with Litecoin on the 19th of May 2020. The partnership will see LTC implemented as a way of payment to get Atari games and consoles, with more to return within the future. it’s keen to form in-roads into the gaming industry and Atari was a clear nostalgia choice for the developers. From Atari’s standpoint, the partnership exposes a replacement avenue of revenue within the sort of LTC getting used to get new consoles or Atari tokens.

What financial institutions use Litecoin?

In 2018, the Litecoin foundation purchased a tenth share in WEG bank AG. As a part of the deal, the WEG bank agreed to use Litecoin to assist with transactions. The deal allowed WEG customers to accumulate cryptocurrencies through a longtime bank also as enabling them to use these new currencies to buy things.WEG was naturally keen to be ready to utilise the rapid transactions times that Litecoin could offer. Equally, Litecoin was wanting to harness the legitimacy that comes with partnering with a longtime bank like WEG. A partnership like this was viewed as an enormous move in helping bridge the gap between crypto and traditional finance.

Litecoin mining

Litecoin uses a Scrypt algorithm for its mining during a bid to form the method more democratic. Bitcoin’s mining system, the one that Litecoin sought to enhance on, was intended to be democratic, allowing all to access the currency. However, it didn’t really end up that way, so Lee made sure that Litecoin would be more accessible to everyone.The Scrypt algorithm demands that the calculations for the act of mining are administered sequentially, instead of allowing them to be administered in parallel, like with Bitcoin. This effectively prevents ASICs (Application-Specific Integrated Circuits) from monopolising the mining process. The prohibition of ASICs use was intended to permit greater participation for mining LTC among those that still believe GPUs (Graphics Processing Units) to handle the task. It should be noted however that it might be very slow and should still use a considerable amount of energy.

The faster validation times for brand spanking new blocks that LTC achieves further democratises the mining process by allowing more potential miners an opportunity to be credited for mining a block.

Litecoin wallet

A Litecoin wallet maybe a piece of software which stores LTC. There are many types:Ledger Nano S, hardware wallet
Tresor – hardware wallet
Exodus – desktop wallet
Atomic wallet – mobile and desktop wallet
Jaxx – Mobile and desktop wallet
Loafwallet – mobile wallet
Different types of wallets offer different blends of security, portability and accessibility.

Is Litecoin well worth the Investment?

Litecoin features a maximum supply cap of 84 million coins, and at the time of writing, almost 64 million have already been brought into circulation. Having a limited supply of coins makes LTC a secure harbour from the depreciation normally caused by inflation. As such, within the future, it might be used as a store useful by investors during turbulent economic times also as an option for creating a day, borderless payments.If investors invest the notion that cryptocurrencies are the longer term of cash, then Litecoin would make an excellent fit with its ethos and structure. it’s specifically tailored for rapid and cheap online transfers and as a result, could well find yourself being one among the premier cryptocurrencies used throughout the planet.

Leave a Reply

Your email address will not be published. Required fields are marked *