Litecoin is the seventeenth-largest cryptocurrency in terms of market cap. This peer-to-peer cryptocurrency was launched in 2011 as a reaction to Bitcoin. That’s why it was introduced as a “Lite version of Bitcoin” when its debut was announced.
Like many other cryptocurrencies, Litecoin enables users to transfer money globally without engaging with a centralized entity. Charlie Lee, a former Google engineer, is the founder of this cryptocurrency.
Litecoin became quite popular in the crypto industry because its mathematical code is similar to Bitcoin. But there are a number of features that make it different from bitcoin.
Litecoin Vs Bitcoin
As compared to Bitcoin, Litecoin’s market cap is pretty small. However, it’s still one of the most traded cryptocurrencies. Litecoin was introduced the overcome the flaws that are found in Bitcoin’s blockchain.
Bitcoin’s blockchain takes around 10-12 minutes to complete a transaction while Litcoin’s blockchain gets it done within 2.5 minutes. So, the users don’t have to wait longer when they’re processing transactions through Litecoin.
Litecoin’s hashing algorithm is more secure against hardware brute-force attacks than Bitcoin and other cryptocurrencies. Litecoin has a total market cap of 84 million coins while Bitcoin’s total market cap is just 21 million coins.
Why Litecoin couldn’t maintain its rank?
The main goal of introducing this coin was to speed up the transaction speed because Bitcoin’s processing speed was pretty slow. Lee mentioned in a publication that he wanted to launch a coin that is silver to Bitcoin.
In its early stages, Litecoin performed pretty well and it attracted a number of investors over a short span of time. It was considered a great alternative to Bitcoin but it couldn’t maintain its rank as new cryptocurrencies entered the industry.
Lee joined Coinbase, one of the largest cryptocurrency exchanges, as a director of engineering in 2013. And he couldn’t properly focus on the development of Litecoin after joining the crypto exchange. It was one of the major setbacks why Litecoin couldn’t compete with the other cryptocurrencies.
Lee rejoined the Litecoin Foundation in 2017 to pursue the development of Litecoin. But he had to face a lot of criticism from the crypto community whenever he tweeted about the cryptocurrency because people thought that he was doing it for personal benefits.
It automatically affected the credibility of Litecoin. Lee finally decided to donate all of his LTC in December 2017 to get rid of these accusations. Although he received plenty of criticism for this move, it played out pretty well.
How Does Litecoin Work?
Litecoin Uses an open-source, cryptographic protocol to create and transfer digital coins. Litecoin’s blockchain maintains a record of all transactions on a public ledger. The miners can access the details of all the transactions that are made using this blockchain. But they can’t get any details of the sender and receiver because these transactions are processed anonymously.
Litecoin’s blockchain generates a mathematical equation whenever a user requests a transaction. The miners take help from advanced systems to solve these equations. The transactions are grouped together into blocks. The blockchain then secures these blocks using cryptographical protocols before attaching them to the previous blocks.
These blocks are attached to each other in the form of a chain but hackers can’t pull information out of these blocks because they’re encrypted using advanced techniques.
How Miners Can Mine Litecoin?
There are thousands of international miners that are currently mining Litecoin. Solo mining, Pool Mining, and Cloud mining are the three different options you can use to mine Litecoin.
The process is almost the same for all three options. First of all, you need to create a personal digital wallet where you can store your Litecoins. Make sure you choose a compatible ASIC miner or a GPU rig for running the software. Don’t forget to evaluate the electrical and other costs you’d have to bear while mining Litecoin.
Once you’ve selected the hardware, you need to download and install the software from a reliable source. In fact, you won’t have to look for unauthentic sources because the software is completely free.
Your system will start mining Litecoin after the installation of software. Make sure you move your Litecoins to a secure wallet as soon as you receive them.
How Litecoin is Trying to Maintain its rank?
Litecoin foundation is continuously trying innovative ways to boost the value of the cryptocurrency.
Litecoin started using the Segregated Witness technology in 2017 to fix the scalability issue of cryptocurrency.
This technology was initially presented for Bitcoin but the developers were reluctant to use it because Bitcoin’s user base is bigger than any other cryptocurrency. However, the developers decided to implement it on Bitcoin when they experienced its benefits on Litecoin’s blockchain.
The only job of this technology is to segregate the data on each transaction to scale the cryptocurrency.
Lightning Network creates an extra layer of user-generated payment channels that can boost the transaction speed while reducing the fees. Like SegWit, Bitcoin adopted this technology after its successful launch on Litecoin. However, Bitcoin’s Lightning Network adoption is pretty fast as compared to Litecoin because Litecoin’s transaction fee is already quite affordable.
The MimbleWimble protocol enhances privacy and obfuscates traceability by modifying the proof-of-work algorithm. The main role of this protocol is to prevent individuals from identifying the transactions on Litecoin’s blockchain.
These are some important changes developers have made to improve the efficiency of Litecoin. And they’re always looking for new techniques that can provide a better experience to the users.
What Factors Affect the Price of Litecoin?
Supply and demand are the most important factors that affect the prices of a coin. Bitcoin’s price movement also affects the price of Litecoin. BTC Dominance is another important factor that may affect Litecoin’s price in different ways. Currently, only a few organizations are considering using Litecoin for their transactions.
If a well-known company announces its plans for using Litecoin, it may also be a positive trigger for Litecoin. Nowadays, some countries are working on regularizing cryptocurrency. Depending on the regularization, Litecoin’s price may increase or decrease significantly.
Litecoin is one of the leading cryptocurrencies that are attracting a number of investors globally. Charlie Lee, the founder of Litecoin, is now paying serious attention to this project. With the help of some brilliant minds, he’s now implementing new ideas to grow the potential of Litecoin.
The long-term investors are again investing money in this project because they’re seeing a huge potential in it in the long run.