The Introduction of Litecoin
The crypto market has become a major trading market since Bitcoin saw its meteoric rise in value in 2017. Ever since then, thousands of cryptocurrency currencies have popped up, claiming to be the next Bitcoin but most have been seen to flop or crash.
Although the blockchain market is filled with Bitcoin wannabes, several cryptocurrencies are slowly but surely making a name for themself, providing faster services, cheaper rates, and scalability.
One of these hallowed crypto coins is Litecoin. Litecoin, created to be a lighter, more accessible version of Bitcoin comes with a whole lot of advantages including speed and cost of operation.
Do you want to find out what Litecoin is? What it has to offer and what rates it goes for presently? Then this guide is for you, let's start with a little background history and then we move on to the good stuff.
Inception Of Litecoin
Litecoin was created in 2011 by Charlie Lee, an ex-Google employee who believed that the Bitcoin code, despite its popularity and the mammoth value contains too many flaws to ignore. These flaws include:
• Its method of mining
• Its inability to make transactions faster and more efficient
• Inability to perform more than a single transaction per second
However, for Lee to successfully build his lighter version of Bitcoin, he needed to go through a procedure called 'Hard Fork'. In a nutshell, Forking is a process whereby, changes are made to an original blockchain to improve its performance. There are two types of forks; Soft fork & Hard fork.
A soft fork is a light upgrade made to a blockchain where the older version still recognizes the new block rules. The hard fork is a last resort used only when large changes have to be made which can only be achieved by the creation of a separate blockchain.
This was how Litecoin was born, by performing a Hard fork on Bitcoin code. So now that we know how Litecoin came about, let us define it;
What is Litecoin?
Litecoin, a descendant of Bitcoin shares several similarities with it including its use as a digital payment system. It is open-source software released under MIT/X11 license, its reuse harbors little restrictions. Litecoin was created to remove the third party involvement in the transfer of funds between individuals both local and international, to be a global payment system. Litecoin is a surrogate child of Bitcoin whose identity lies in real-world problems it was invented to solve.
Its whole existence and process are dependent on the Blockchain technology which is used to safely store and transfer information between two or more entities. Litecoin although less valuable than Bitcoin has a lot of advantages over it, let us discuss the major features of the up and coming Cryptocurrency in contrast to Bitcoin;
Features Of Litecoin
Litecoin has made major strides in its search for perfection of the Bitcoin code and the rate of its transactions shows exactly how. Litecoin is 4 times faster than Bitcoin as a single Bitcoin block takes about 10 minutes for confirmation while Litecoin only needs 2.5 minutes to confirm its blocks. This means that Litecoin produces 4 blocks in the time it takes Bitcoin to create 1.
Mining is a record-keeping service that facilitates the process of creating new coins. Both Litecoin and Bitcoin utilize a consensus model called Proof-of-work(POW) to complete the mining process.
But Bitcoin uses Application-specific integrated circuits(ASICs) hardware for electricity which is very expensive, while, Litecoin makes use of script algorithm which only needs Graphic processing units (GPUs) which are much cheaper to use.
Although there is a limit, scalability is the ability and capability for a platform to handle transactions. Bitcoin and Etherium, the first and second most valuable cryptocurrencies average a maximum of 7 and 15 transactions per second, respectively. While Litecoin processes a whooping 56 transactions per second. This makes it a whole lot faster than BTC and ETH.
This feature enables a cross-chain exchange of coins without the help of a third party individual. It functions with the use of Hashed time lock contracts(HTLCs) which are convenient applications that implement several protocols including the Lightning protocols.
HTCLs enable payment channels to be opened up to allow funds to be transferred between parties with the agreement of a set deadline. However, it is in its early stages of development.
How Does Litecoin Work?
Because Litecoin originates from Bitcoin, if you know the workings of Bitcoin, then understanding the processes of Litecoin shouldn't be difficult. Litecoin makes sure of Cryptography to enable exchange and ownership of its cryptocurrency, LTC. The main differences between the workings of Litecoin and Bitcoin are:
1. There is a conscious effort to finalize transactions as quickly as possible
2. It makes use of a different mechanism for mining algorithm
Litecoin in 2017 adopted "Segregated Witness" which is a technology that helps cryptocurrencies place additional transactions into each block. In that same year, a development that showed that it could use a layered network design, the first lightning transaction was completed.
84 million Litecoins can be produced at a time which is quadruple that of Bitcoin's which are around 20 million with each block of LTC is created every 2.5 minutes. Litecoin presently sells for a price of $61.64 per LTC with an increase of 6.48% in the last 24 hours at a total volume of $3.01 billion, having a market cap of $4.08 Billion as at the time of speaking.
As more and more people begin to embrace the crypto market, there is a search for further investment opportunities besides Etherium and Bitcoin, a hidden gem that can turn them into millionaires.
Litecoin is one of the few crypto coins that have the potential to become one of the highest-rated cryptocurrencies in the market. But remember that the crypto market is extremely volatile, so education and care are the watchwords. Good luck!
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