What is Litecoin and how is it different from other cryptocurrencies?
Today there is no shortage of cryptocurrencies to trade, but we are going to talk about Litecoin in particular. So, what is it and what are the differences between Litecoin and other cryptocurrencies?
- What is Litecoin?
- Technical features
- Advantages compared to other coins
- Disadvantages compared to other coins
What is Litecoin
Litecoin (LTC) is a blockchain-based cryptocurrency created by a former Google employee Charles Lee. It was initially meant to be an improved version of Bitcoin, the very first cryptocurrency, and is largely based on Bitcoin’s technology. It is fully decentralized, highly anonymous and fast in terms of transactions, which is why it is often referred to as the “digital silver” similarly to Bitcoin, which is called the “digital gold”.
From the day of its creation Litecoin has made a long way to its today’s position among the Top-10 cryptocurrencies. As of January 2020, it is the 6th largest cryptocurrency in the world in terms of capitalization.
Now let’s talk about some important technical details that should give you a better understanding of how Litecoin works:
- Litecoin has a limited number of coins that can ever be mined – 84 million, and ¾ of this number is said to be reached in 2020;
- Litecoin’s blockchain is build by the miners who add new block every 2.5 minute;
- The reward for adding each new block to the blockchain is 25 LTC, but it is expected to be halved in the nearest two years.
Advantages compared to other coins
Litecoin has a number of advantages that make it attractive for mining and trading:
- Transferring LTC from one wallet to another can be done as quickly as sending a text message, which makes it perfect for quick payments;
- LTC transaction commissions are very low, which is one of the reasons for Litecoin’s popularity;
- Transaction between the wallets do not need to be approved by anyone and are almost impossible to track. LTC transactions are hidden not only from outside the blockchain, but also from other users within the Litecoin network;
- As of now, LTC mining is still beneficial and can bring profits to the miners because of the short block creation time, less strict hardware requirements and relatively high reward, but that can easily change over time;
- LTC’s code and technical characteristics are similar to Bitcoins, which is why it is easily supported by all major cryptoexchanges and cryptowallets.
Disadvantages compared to other coins
Litecoin, like any cryptocurrency, has its disadvantages:
- LTC is highly volatile. Its price started at about $3.4 in 2013, dropped to $1.5 in 2015, raised up to $327 in 2018 and dropped down to about $50 as of January 2020. There are many factors that define the price of Litecoin, and it is very hard to predict;
- Litecoin’s source code is fully open, which makes it vulnerable to hacker attacks;
- Litecoin’s algorithms constantly redefine the complexity of mining. The requirements for computer resources and energy needed to produce the blocks for Litecoin’s blockchain are automatically changed every 3.5 days, which is a lot faster than the same parameter for Bitcoin. This makes it hard for miners to predict the outcome from mining.
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