What is Litecoin?
Litecoin is one of the most liquid and popular cryptocurrencies in the world today. As of March 2019, Litecoin is the fourth most valuable cryptocurrency. Litecoin transactions occur via a software called blockchain which enables them to be immediately verified. Litecoin can be used to purchase goods or services instantly. It’s also easily transferable—allowing owners to instantly send Litecoins to anyone in the world. The transaction fees are also much smaller than standard payment processors. Litecoin describes itself as: “A peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.”
There is a finite number of Litecoins, and they will never exceed 84 million. The reason surrounding the limit on the number of Litecoins that can be created is to avoid having the value eroded by inflation. You can trade Litecoin on several exchanges and buy or sell them in different fiat currencies such as the US dollar, Euro, Yen or Pound.
When was Litecoin Created?
Litecoin was established in 2011 and created by Charlie Lee, under MIT/X11 Lісеnѕе. Litecoin has many of the same features as Bitcoin which was created by Satoshi Nakamoto. Nakamoto made the blockchain code public, allowing Lee to make some modifications to create Litecoin. Initially, Litecoin was referred to as “altcoin” as it was an alternative coin to Bitcoin.
What makes Litecoin different from Bitcoin?
Bitcoin was the original cryptocurrency created in 2009. Satoshi Nakamoto’s goal was to create a currency and payment system that would be safer and faster than current systems. The blockchain technology allowed for a never-ending ledger which could track every transaction.
The key differences between Litecoin and Bitcoin are the algorithms used to run the payment system as well as the speed at which new coins are mined. The Litecoin algorithm is four times faster than the Bitcoin algorithm at generating new coins. Litecoin uses an algorithm called Scrypt while Bitcoin uses SHA-256. Litecoin can produce a new coin every 2.5 minutes while it takes approximately 10 minutes to mine a new Bitcoin. The confirmation of transactions is performed by Litecoin miners who benefit from creating new coins. Miners who produce and use new coins, use computing power to process and confirm the transactions.
Speed and Efficiency of Litecoin Versus Bitcoin
Scrypt, the Litecoin operating software, has a more efficient algorithm for mining cryptocurrency. The code is more flexible, and it is designed to run on generic hardware. Scrypt, unlike the Bitcoin algorithm SHA-256, performs at its highest levels on high-speed random-access memory (RAM). This allows a low barrier to entry relative to Bitcoin. Because regular miners have access to standard central processing units, Litecoin is a more accessible way to mine for cryptocurrencies.
Bitcoin runs on the SHA-256 algorithm which is known for its high level of complexity. Since the code is open source, it has been altered over the years and uses Application-Specific Integrated Circuits which is hardware that has been customized by miners to run a Bitcoin process. The Bitcoin algorithm is very processing power intensive. Despite the free software, the barriers to entry are very high due to the complexity of the algorithm.
Can I Trade Litecoin?
Yes, you can trade Litecoin on various exchanges. You can physically make an exchange for the Litecoin cryptocurrency or you can purchase it by using a contract for difference (CFD). You can also swap Litecoin for another cryptocurrency or for fiat currencies.
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