Their volatile nature attracts a high level of attention, while also subjecting them to quite some criticism. This eccentric attribute has boosted a great deal of interest amongst the speculators, investors and also among those who are interested in observing how the cryptocurrency market will be unfolding in the future. Amongst all these cryptocurrencies, the most popular one which has become a rising fame in the financial world is Bitcoin. Alongside Bitcoin, some other known cryptocurrencies include Ethereum, Dogecoin and the one we will be featuring in this blog - Litecoin.
The rapid surge made it the hottest new trend in the world of cryptocurrency at that time. You can check out the History of Litecoin in detail here. In this blog, we will be talking about Litecoin, how it works, how it can be purchased and also how the cryptocurrency differs from the leading Bitcoin.
Initially we started out with physical money, that includes notes and coins. Then sprouted the e-Money, aka the electronic money that reflects on our e banking applications. Both these forms of money are issued to us by the Government. Later emerged the cryptocurrency , that is a kind of electronic money which has not been issued by any Government.
Cryptocurrency is basically an online only digital currency that serves as a direct financial exchange among users, barring the involvement of any third party or bank. Several cryptocurrencies are decentralized, which include Litecoin. Related blog - Centralized and Decentralized Cryptocurrency Exchanges.
The primary purpose of this form of currency is the decentralization of the banking system. This is largely owing to the inconveniences that are faced by the public while sending or receiving money across financial institutions or to a different country. These inconveniences have only escalated in the present times, owing to which cryptocurrency becomes an intriguing solution for technology buffs and institutions engaged in such transactions.
It shares several similarities with Bitcoin and this cryptocurrency is actually based on the original source code of Bitcoin.
Litecoin had been set up for being leveraged for less costly transactions and for being more efficient in terms of daily use. Relatively, Bitcoin is considered as a store of value to be adopted in the long term. The coin limit market cap is much higher on litecoin than bitcoin, and the mining process is far quicker. This means transactions are faster and cheaper, although generally smaller in size.
Similar to Bitcoin, Litecoin is a form of digital money. By making use of the blockchain technology , litecoin can be adopted for direct transfer of funds between individuals or businesses. This helps to ensure that a public ledger is recorded of all the undertaken transactions and which enables the currency to set up a decentralised payment system that is devoid of censorship and government control.
Suggested Read - Bitcoin Mining. For coming to terms with how litecoin works, it would be effective to firstly gain an idea of the blockchain technology. Suppose you have lent money to a certain person who, at a future point, claims you have not lent it to them and refuses to give it back to you. However, Litecoin has some special features like a unique Litecoin mining hashing function, faster block generation time, and increased maximum coin supply that makes it stand out in the cryptocurrency sphere.
But both Bitcoin and Litecoin are decentralized cryptocurrencies that encrypt themselves from any government or central authorities. For example, cryptocurrency miners solve tough math puzzles using a hash algorithm in order to reach a consensus through their respective networks. After successfully adding blocks of valid transactions to their blockchains, miners are provided with block rewards.
Storage and transactions: The major reason why crypto investors choose Bitcoin and Litecoin over other cryptocurrencies is their easy transaction facilities. Both the cryptocurrencies can be easily purchased or exchanged using the crypto trading platform.
The mining methods are also comparatively simple. Other similarities include the necessity of a cold wallet, prices, regulations, etc.
Besides, both Bitcoin and Litecoin are profoundly dramatic and greatly volatile. Despite having many similarities in the core level, Bitcoin vs Litecoin has equal or more differences as well. However, the crowd over Bitcoin is enormous and it is increasing day by day.
Therefore, crypto investors sometimes prefer Litecoin over Bitcoin for investments. Transaction speed: One thing that makes crypt investors choose Litecoin over Bitcoin is its transaction speed. A unique Litecoin mining hashing function. A faster block generation time. Increased maximum coin supply. Miners of both cryptocurrencies race to complete extremely challenging math puzzles using a hash algorithm in order to achieve consensus throughout their respective networks, win the right to add blocks of valid transactions to their blockchains, and earn block rewards.
The devices that miners use to complete these extremely challenging math puzzles are computers that vary significantly with respect to their design and configuration. Initially, the core machinery used for Bitcoin mining relied on a central processing unit CPU , which you can think of as the backbone of a regular computer, more or less.
And, as most competitions tend to go, new technology was developed strictly for the purposes of Bitcoin mining. With fewer people with the knowledge, time, and capital to acquire, configure, and maintain ASICs, mining on the Bitcoin network has become more centralized and exclusive, which compromises the security and resilience of the network.
The goal was to make the Litecoin network more accessible to individuals, who are the biggest proponents of the coin. So it was extremely important for individuals to be able to mine litecoin with their CPUs in the beginning.
On average, new blocks on the Litecoin network are generated every 2. For each block generated on the Litecoin blockchain, miners are rewarded with a predetermined amount of LTC, known as a block reward. This 4x increase in blocks per halving period means that Litecoin generates four blocks for every one block that Bitcoin generates.
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