What are the characteristics of Litecoin?
Litecoin is a fully decentralized payment network which uses a currency called Litecoin (abbreviation = LTC). Its creation dates back to the year 2011 and it was one of the first „altcoins“, which means that it is based on a principle similar to that of Bitcoin – the first cryptocurrency.
Litecoin was created by modifying the code of Bitcoin, with certain practical improvements. In comparison to Bitcoin, it is mined 4x faster, which gives it the advantage of faster transactions, and the number of coins is 4x higher (84,000,000). Transaction fees are lower. The hashing mechanism is different, too – it allows for better mining on GPUs (the Scrypt algorythm is used).
The main goal of Litecoin is to be a faster variation of Bitcoin with cheaper transactions. If Bitcoin is called the gold of the modern era, Litecoin could be called „the silver of the modern era“.
History of Litecoin
Litecoin was created on October 7, 2011. Its creator is Charlie Lee who uses the nickname satoshilite and who used to work for Google. Litecoin’s main characteristic is that it uses the Scrypt algorithm. This algorithm was developed by Colin Percival in 2009 and it is intended for suppressing the steep hardware demands of mining. Instead, mining requires a large amount of memory space for computing processes; this is what distinguishes it from the algorithm used by Bitcoin. Litecoin started significantly developing at the beginning of 2017. At that time, Charlie Lee published his Vision for SegWit and Lightning Networks on Bitcoin and Litecoin, which were implementations for speeding up transactions and lowering their costs. Currently, Litecoin counts among the most known cryptocurrencies which are accepted by an increasing number of traders (merchants).
Litecoin’s ecosystem is formed by its users and miners.
Complete classic transactions by using their wallets (from a user’s point of view, it works the same way as electronic banking, which means that with Litecoin, you receive and send amounts of currency to generated addresses). If you are sending Litecoins or their fractions (for example, 2.5 Litecoin), you simply send it from the online wallet which you created, your desktop wallet (which you downloaded to your PC), or your hardware wallet, to an address provided to you by the recepient. And vice versa: if you want to receive Litecoins from someone, you simply tell them the address of your wallet. The wallet’s address thus serves as an „account number“. It is truly simple and works on the same principle as regular electronic banking.
Represent an important link in Litecoin’s ecosystem because their computing power ensures the functioning of the network itself. The miners‘ equipment carries out energetically demanding computations which verify blocks with transactions and are supposed to prevent misuse of the network. In this regard, Litecoin is founded on the so-called proof-or-work. Miners receive fees from transactions and newly mined Litecoins are distributed among them. The algorithm which is used for this is called Scrypt – it’s a different algorithm than the one used by Bitcoin. The reward for a mined block is 25 Litecoins.
It’s important to note that these days, it is not profitable at all to mine Litecoin on home computers because the computing demands of the Litecoin network are so high that blocks are always mined by specialized miners who have a high mining power at their disposal. They use specialized hardware (you can see one type of this equipment in the image).
Are transactions anonymous?
Just like with Bitcoin, transactions in the Litecoin network are pseudonymous which means that those who know which address you use could look up other transactions completed by this address due to the blockchain’s public nature (they can see the amount of the transaction but they can hardly find out the other party unless it’s them). However, a nearly 100% anonymity can be easily ensured by generating a unique address for each transaction.
Number of Litecoin coins
The number of Litecoins is set firmly to 84,000,000. Currently, nearly 63,500,000 have been mined. Each coin is divisible to a maximum of 8 decimal places, meaning that you can purchase for example 1.55 Litecoin. The smallest unit, or 0.00000001, is called litoshi.
All time high – 375,29 USD (19 th of December 2017).
Litecoin counts among the most widely spread cryptocurrencies, which means it’s not a problem if you want to buy some. Each cryptocurrency exchange sells Litecoin. Litecoin can also purchased at the Binance cryptocurrency exchange with a credit card or by exchanging it for a different cryptocurrency. For european users we recommend also Coinmate.
Since Litecoin is one of the most widespread cryptocurrencies, it is fully supported by all available hardware wallets.