Friday, September 30, 2022

What is Litecoin (LTC) and Why Was it Created

Since Bitcoin’s inception, Litecoin has been one of the most prominent cryptocurrencies to emerge. This decentralized cryptocurrency has consistently been one of the top 20 most valuable digital currencies by market capitalization, making it a popular choice for investors.

On October 13, 2011, it became the first cryptocurrency to use Segregated Witness (SegWit) technology. A former Google software developer, Charlie Lee, came up with the idea for Litecoin. Lee’s “playing about with the Bitcoin codebase” resulted in the creation of a split of the Bitcoin network, to be a cheap and more user-friendly alternative to Bitcoin. It began “primarily as a fun side project,” but as time passed, its importance increased. 

Litecoin offers a lot of technological advantages over other alternative cryptocurrencies, such as faster block propagation speeds and the usage of the Scrypt hashing algorithm. 

How does it function? 

With Litecoin’s Proof-of-Work method, transactions can be confirmed and new blocks can be added to the blockchain, allowing for faster transaction processing. When a new block is validated, the block time is how long it takes for that block to become valid. A new block is added to the Litecoin blockchain once every 150 seconds, whereas a new block is added to the Bitcoin blockchain once every ten minutes.

The Blockchain keeps track of every Litecoin transaction, no matter how small or large it may be. In order to prevent malicious actors from inflicting harm to the network, all transactions are included in blocks that are generated by miners (hardware equipment that provides hashing power) and validated by nodes.

What makes Litecoin standout?

Litecoin has a distinct advantage over Bitcoin in terms of both security and decentralization, which makes it an attractive alternative. The Litecoin blockchain charges 1/1000 of a Litecoin for each transaction, eight times less than the cost of Bitcoin, and it can process 54 transactions per second.

It is clear that Litecoin is progressing faster than Bitcoin over the course of several years, as evidenced by the acceptance of Segwit, the first sanctioned atomic swap, and having plans to add MimbleWimble via extension blocks to enhance coin anonymity.

However, both Litecoin and Bitcoin have a number of similar features that make them closely related. They both employ the proof-of-work validation method. Nodes must be approved by miners before a transaction can be performed. To avoid double payments and other scams.

The halving of a key is a notable cryptography event. As soon as it hits the halving point, the money from mining rewards drops by half. In terms of currency halving, both Bitcoin and Litecoin are very comparable. A halving occurs every four years, with a continual countdown to the next halves, by specialized websites keeping track of the halving dates.

Another common feature is that both are extremely limited in supply. Cryptocurrencies, in contrast to traditional currency, have a finite supply of money. 

Litecoin-based applications

The halving mechanism of the Litecoin currency is used to keep the inflation rate of the cryptocurrency under control. Its dependability is a significant factor that works in its favor, as it can be used to conduct transactions at a cheaper cost. Because of this, LTC can be included in a portfolio to provide investors with exposure to the movements of the cryptocurrency market while avoiding any unpleasant surprises.

The cost of moving funds around on the Litecoin network is significantly cheaper than on networks with larger transaction fees, this ensures that privacy on the Litecoin network is maintained and much easier. It can also be used to pay for goods and services, as most cryptocurrency payment processors accept it as a method of payment.

The LTC is also an extremely liquid cryptocurrency that can be found on the major cryptocurrency exchanges, making it an excellent choice for traders. Given the low cost of transactions on its network, some people even use it to transfer funds between other exchanges or lending platforms in order to avoid the hefty transaction costs associated with networks such as Bitcoin or Ethereum.

What is the most efficient method of buying and selling Litecoin? 

It is possible to purchase Litecoin in a variety of ways. There are cryptocurrency exchanges where you may purchase Litecoin with a credit or debit card at a lower fee. Another popular option is to utilize a Bitcoin ATM to purchase LTC at a higher price than you would normally pay. 

Also, it is customary for the price of a Litecoin to be quoted against the US dollar when you purchase it on an exchange. In other words, you’re swapping dollars for litecoin. To make a profit, if your Litecoin is now worth more in USD than it was when you purchased it, you can then sell. However, the price of your investment will decrease if you opt to sell before the price drops further.

How profitable is Litecoin?

Even though Litecoin has been at the top for a long time, many other cryptocurrencies have recently surpassed it in terms of market capitalization and ranking. While it is changing hands at $106.6 per data from CoinMarketCap, tt is difficult to predict what the price of Litecoin will be by the end of the year, but recent events provide a reason to be optimistic.

Whatever benefits the Mimblewimble inclusion may bring, the foundation is as solid as it has always been. Finally, Litecoin has a global community due to its long history, and many have predicted that LTC will continue to be less expensive and faster to transact with than Bitcoin in the foreseeable future. That is what separates Litecoin as a unique form of digital money from the rest of the pack.

Ayo Alabi
Ayo Alabi is an experienced writer and Fintech enthusiast, passionate about educating people and helping businesses that want to see their Google search rankings surge. Her articles have appeared in a number of e-zine sites, with focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.

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