Litecoin (LTC) is a virtual currency that enables instant payments with near zero fees to any person on the planet. It is an open source, fully decentralized global payment network secured by mathematics. Math also enables individuals to gain control over their finances. Some of the main advantages of Litecoin are the faster confirmation times for transactions, and its improved storage efficiency. Its trade volume, together with its degree of liquidity and impressive support on behalf of the industry turn Litecoin into an excellent proven medium of commerce that is complementary to the world-popular Bitcoin. However, Litecoin and Bitcoin are almost identical, from a technical point of view.
When Was Litecoin Released?
The altcoin was released at the end of 2011, with the help of an open-source client. Its creator is Charlie Lee, a talented Google employee. The Litecoin network went live on the 13th of October, 2011. It was originally a fork of the Bitcoin Core client, but it had a slower block generation time, a larger number of maximum coins, and it used a scrypt – a password-based key derivation function instead of the SHA-256 algorithm. It also came with a relatively new graphical user interface.
The following month after its launch, Litecoin’s value made a 100% leap within a time frame of 24 hours. And it managed to reach a mind-blowing $1 billion market cap at the end of 2013. Four years later, Litecoin is the first of the top 5 altcoins that adopted Segregated Witness – a soft fork change in the transaction format of the Bitcoin. In the spring, the very first Lightning Network transaction was done with the help of Litecoin. It took less than a second to transfer 0.00000001 LTC from Zürich to San Francisco.
How Is Litecoin Different From Bitcoin?
- Litecoin has the same open source code like the one used by Bitcoin. However, engineer Charlie Lee wanted Litecoin to be faster than its big brother. About four times faster. Hence, the goal of the Litecoin Network is to process a block every 2.5 minutes, compared to the 10 minutes Bitcoin needs to complete a similar transaction. This allegedly enables Litecoin to provide faster transaction legitimacy confirmation. It can also process more transactions over the same time frame. This is extremely useful for merchants who need to many small transactions on a daily basis.
- Litecoin relies on scrypt in its proof-of-work algorithm. This is a sequential memory-hard function that solicits more memory compared to a non memory-hard alternative. This automatically leads to more money being spent on building complex field-programmable gate array and application-specific integrated circuit mining devices for it. However, the mining is simplified and consumes less energy.
- One of the biggest reasons why lots of altcoins hold intrinsic value is due to their limited number or supply. The limit of circulating LTC will be four times that of Bitcoin’s limit, as officially stated at the launch. This means that for a 21 million Bitcoin limit, LTC will be limited to 84 million. At the moment, there are around 40 million Lite coins in circulation, which means this altcoin has reached half of its original limit supply.
- Bitcoin is the incontestable leader of the market; but litecoin ranks among the top five cryptocurrencies at the time of this writing.
- Litecoin is better protected against flood attacks. A flood attack occurs when when a network is flooded with spam transactions that fill up the blocks and clog up the blockchain. Charlie Lee claims he and his team have made flood attacks against LTC as economically infeasible as possible. Practically, Litecoin is immune to these attacks due to the fix patched in it. It refers to charging senders a fee for every small output they create. Attackers would have to pay a lot more to complete their spam attacks, which would discourage most of them.
How To Mine Litecoin
Mining Litecoin is somehow different from mining Bitcoin. The two have a slightly different hashing algorithm to solve blocks. The number of coins distributed every time a miner finds a solution to a math problem or a puzzle also differs. Whenever a new transaction is made, it becomes part of a group of other transactions that have been submitted recently within a block that is protected cryptographically.
Miners (computers) use CPU (central processing unit) or GPU (graphics processing unit) cycles to solve complex mathematical problems. This is done by passing the data within a block through a hashing algorithm up until the collective power can find a solution. When this occurs, all transactions found in the respective block are verified and labeled as legitimate.
Whenever a new block gets solved, miners receive a predefined number of coins. The coins are distributed among the hashers who contributed to finding the correct solution. The more powerful hashers receive most coins. If you wish to mine cryptocurrency, Litecoin in particular, you will need to join a pool and mix your computing power with other people to receive these coin rewards.
How To Buy LTC
If mining is simply not your thing, or you do not have the skills, time, or resources for it, there is always the alternative of buying. Find a reliable exchange site where other cryptocurrencies are sold. You should have no problem finding sites that allow you to buy LTC using fiat currency including US dollars and EUR.
Why Do You Need A Litecoin Wallet?
Since most cryptocurrencies are stored in digital wallets, you will also need one for your LTC buying needs. You can choose form a rich selection of wallets, including software-based wallets you can install on your computer or smartphone, and physical hardware wallets. You can also take into consideration the paper wallet solution – a rather obsolete and more complex way of storing LTC. It requires you to generate and print out private keys on a computer with no connection to the Internet. Each wallet comes with its own set of private keys needed to receive and send coins to and from your litecoin address. These wallets do have the security advantage of using keys that are not stored in wallets connected to the internet – eliminating the risk of hackers and cyber-attacks.
Wallets that rely on apps exist in the form of desktop or mobile software. They are compatible with most operating systems and devices and they can be found in the form of third-party applications, or the official Litecoin Core, developed by the Litecoin Development team. Litecoin Core eliminated the need for middlemen when downloading the entire blockchain from the network.
What Is The Litecoin Block Explorer?
Litecoin transactions within a blockchain are available to the public and entirely searchable. This is also the case with other public cryptocurrencies. A Litecoin block explorer will significantly simplify the way one can use these these records and look for a certain transaction, block number or hash, transaction or public key hash, chain name, address balance. There are lots of block explorers to choose from, and you can search until you find one that bets caters to your individual needs. Whether you need a block explorer with complete REST and websocket APIs used for writing web wallets or something else, you should be able to find it at the end of your search.
What Are Atomic Swaps?
The introducing of the Atomic Swaps is another amazing Litecoin feature worth mentioning. An atomic swap allows a cross-chain exchange of coins without having to engage any third parties. Hence, the elimination of unnecessary transaction fees.
These swaps work with the help of Hashed timelock contracts. Also known as HTLCs, these are extremely convenient ways of making payments. The Lightning Protocol is also an implementation of the HTLC. Up until now, channels have been using timelocks. An HTLC utilized timelocks along with “Hashlocks”. They work by opening up of payment channels to transfer funds between parties before the pre-agreed deadline expires. The payments are acknowledged with the help of cryptographic proof. It also enables a party to forfeit the payment they have received and have it return to the payer.
Litecoin is a cryptocurrency that is becoming more mainstream and gaining more trust from the public with each passing day. The activation of Segwit, the use of the Atomic Swaps, and the huge interest taken in showing the genuine goal and potential of cryptocurrencies through the risks taken by LTC are turning it into a critical actor in the market. Moreover, there is further interest to insert the lightning network into the system.