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What is Litecoin

what is litecoin

Founder: Charlie Lee

Founded date: October 7, 2011

Category: Open source decentralised blockchain

Mining: Scrypt algorithm (FPGA and ASIC)

Currency code: LTC

Official website: https://litecoin.org/

 

An introduction to Litecoin

Litecoin

With the advent of modern era , and the currency mode having a paradigm shift towards cryptocurrencies , Litecoin finds its place in one of the most promising cryptocurrencies of the future. Referred to as the sibling of Bitcoin1, Litecoin is a peer to peer crypto currency, that has gained exponential growth in terms of its acceptance and usage since its inception in 2011.

The original code is a fork from Bitcoin. Like Bitcoin, it is a form of decentralised digital currency that utilizes a blockchain2 and has a well versed public ledger of all transactions. Litecoin is widely used for fund transfers in real time between individuals and businesses. With fast transaction times it is doing a great job at eliminating out the middle man such as the bank or other payment gateway.

 

The Litecoin differentiator

Litecoin has gained momentum in the crypto world. There are 3 basic, but effective parameters that are so far insuring Litecoin’s success:

  1. Speed/ Real Time Transfers
  2. Coin Volume
  3. Market Cap 3
  4. The technology

Litecoin has the capacity to produce 1 MB block, almost every 2.5 minutes. This is exponentially higher than Bitcoin. Now, since the Bitcoin has a lower transaction speed, it becomes invariable to have a higher fee in order to oversee the competition and secure a place in the next block, to have the inclusive transaction.

Litecoin solves this issue of high transaction fees and low transaction speed. The capacity of 1MB block every 2.5 minutes provides considerable speed and efficiency in processing of transactions, almost 4 times than the speed of Bitcoin. In other words Litecoin has 4 times the scaling capacity compared to Bitcoin as it produces 4 x 1MB blocks in the same time frame that Bitcoin uses to produce only 1 x 1MB block.

Litecoin transactions take just over two minutes to go through, compared to an average of around nearly 300 minutes for bitcoin.6

Litecoin has also recently gone through testing of atomic swaps with Bitcoin in the test environment. That means the two currencies when performing a transaction will be interchangeable without an exchange. This almost invalidates BTC-LTC pairs. Although uncertainty lies from this advent in technology, it could certainly represent a huge boost to Litecoin.

In May 2017, Litecoin became the first of the top-5 (by market cap) cryptocurrencies to adopt Segregated Witness. The first Lightning Network transaction was completed in the same month with a transaction time under one second.7

 

Bitcoin vs Litecoin

Bitcoin versus litecoin

  1. Litecoin and Bitcoin are the two sides of the same coin, with notable differences. Litecoin at inception had the same open source code as Bitcoin. The major difference between the two crypto currencies lies in their transaction speed4. Through its exponential speed generation of block generation, almost 4 times than that of Bit coins, Lite coins can fetch the legitimate transaction confirmation at a faster pace, along with higher volume of transfer over the same time frame.
  2. Dependency on the volume creation of the Crypto currencies5  is a major decisive factor in determining their wider usage and adaptability. This limitation, though is temporary but has a decisive impact, as some of the major crypto currencies have intrinsic value due to the above mentioned factor. Bitcoin has a limitation of 21 million coins, Litecoin will have maximum limit of 84 million.
  3. The market cap is a volatile subject of discussion as major crypto currencies have wide fluctuations in terms of their price valuation and volume of coins in the market available for transactions. In terms of the current scenario and taking into account the results of previous years, though Lite coin lags behind Bitcoin in terms of its market share, but still has made its mark in the industry as one of the top 5 crypto currencies, at the time of its publication.
  4. One of the major differences that differentiate Bitcoin and Litecoin from each other is their mining algorithms. Both of them follow a different hashing algorithm, to get blocks solved, but the hashing algorithm has the same mode of operation in both. Bit like a programming language defined keyword, which may have the same modulus operandi, but difference of usage in different programs.
  5. Bit coin employs SHA-256 (a short name for Secure Hash Algorithm 2) considered to be relatively complex in computing, whereas Lite coin relies on a memory-intensive algorithm known as the Scrypt. The difference in their work algorithm means a different set of hardware for each one of them.

 

 

Use Case

By maintaining full compatibility with the Bitcoin API, Litecoin is very easy to integrate into existing applications that already offer Bitcoin support. As such, if you are a developer using Bitcoin, it is extremely easy to enable support for Litecoin transactions.

If you are a merchant, you can easily integrate Litecoin into your web site or application using existing 3rd party shopping cart plugins.

 

Owning Litecoin

As it is a decentralised currency anyone can setup a mining rig to mine Litecoin- whether it is still feasible for the small time miner is questionable. If you’re still keen on getting your hands on Litecoin, the cryptocurrency can be purchased through most large and reputable exchanges.

 

 

 

References

1. https://www.lifewire.com/what-is-litecoin-4151693
2. https://www.forbes.com/sites/madhvimavadiya/2017/12/12/what-is-litecoin-why-is-ltc-price-going-up/#60c5848c6661
3. https://www.investopedia.com/articles/investing/040515/what-litecoin-and-how-does-it-work.asp
4. http://fortune.com/2017/12/12/litecoin-bitcoin-price-2018/
5. http://www.telegraph.co.uk/technology/0/what-is-bitcoin-everything-need-know-about-the-cryptocurrency/
6. https://www.cnbc.com/2017/12/14/bitcoin-ether-litecoin-ripple-differences-between-cryptocurrencies.html
7. https://en.wikipedia.org/wiki/Litecoin

 

 

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