As more and more people enter the world of cryptocurrencies, they are looking for investment opportunities outside of Bitcoin and Ethereum. Litecoin (LTC) has been a popular choice lately, reaching one of the top 5 spots among the most used cryptocurrencies.
Litecoin is often referred to as bitcoin’s younger sibling. It is a peer-to-peer cryptocurrency that has become very popular since it came to light in 2011. Litecoin is used to transfer funds directly between individuals or businesses without the need for an intermediary, such as a bank or payment processing service. This system based on algorithms provides a network that allows people to control their finances. Litecoin offers faster transaction confirmation times and better storage efficiency than Bitcoin, which is the most popular cryptocurrency.
Litecoin is based on a similar open-source system as bitcoin, but it has some significant differences. One of the considerable differences between the two cryptocurrencies, created by former Google Charlie Lee technician in October 2011, is the speed of their transactions.
Because it generates blocks approximately four times faster than bitcoins, Litecoin can confirm the legitimacy of transactions much faster and process a much larger number of them in the same period without having to modify the software in the future.
Number of coins
One of the reasons some cryptocurrencies have intrinsic value is their limited supply. When miners obtain new Bitcoin or Litecoin, they are effectively reducing the amount of coins left. Once the market obtains the full amount of coins that was pre-set, there will be no more coins to obtain. While bitcoin has a limit of 21 million coins, Litecoin can reach a maximum of 84 million.
Even though Litecoin has a small market capitalization compared to Bitcoin, it is still classified among the top five cryptocurrencies available. These classifications vary according to the price and number of coins in circulation.
You can protect your investment by storing your assets in an encrypted wallet, plus you can see transactions and account balances. Using a private wallet gives you better security than storing your cryptocurrency in any online exchange. It protects against viruses and Trojans designed to steal from you, and also provides security controls before sending payments.
What can you use Litecoin (LTC) for?
Cryptocurrencies have the same purpose that traditional “fiat” currencies have. This means that you can use them to pay for goods and services. Although cryptocurrencies are famous for their use in the dark network for transactions related to drugs and other illegal products, an increasing number of legitimate and legal merchants accept Litecoin as payment. Whether you are looking for jewelry, clothes, or even luxury cars, there are many places where Litecoin (LTC) can be used.
Litecoin is also very useful to transfer money to friends and family. Due to its shorter blocking time, quick confirmations, and rates that rarely exceed a fraction of the dollar, you can transfer Litecoin (LTC) to anyone quickly and cheaply. The only thing you need to do this is their wallet address.
Like some other alternative cryptocurrencies, the interest in Litecoin (LTC) as a transaction medium has increased in recent months due to the peak value of bitcoin and its rising transaction fees.
Although cryptocurrencies such as Litecoin were initially designed to execute online transactions, just like traditional currencies, their value increases and decreases based on several market factors. Cryptocurrencies, with a lack of government support, tend to fluctuate much more, which is why Bitcoin and others have seen significant interest in large investors in recent months.
Litecoin also suffered fluctuations which made many people very wealthy in a relatively short time. Like many other cryptocurrencies last year, its value increased exponentially. On December 18, 2017, Litecoin reached its historic high of $ 360.93, an incredible 8200% increase over the previous year’s $ 4.40 price. This considerable increase shows that Litecoin can also be a great store of value.
Another significant difference between Bitcoin and Litecoin is the hash algorithm they use in order to solve the block. Also, the number of coins issued each time a solution is found is different to that of BTC.
When someone executes a transaction, the information of that transaction generates a mathematical problem. The information of many transactions makes an even larger, more complex problem. Computers known as mining rigs use their GPUs and CPU cycles to solve these complex mathematical problems, passing block data through an algorithm until their collective power finds a solution. At this point, all the transactions in the relevant block are entirely verified and the block is closed as legitimate.
Miners also receive a reward each time they solve a block. This is because the system allocates part of the coins in order to reward the miners that help solve the problems. The miner with the most efficient hash gets the largest reward. Because of this, people usually join in groups in order to combine their computing power and thus receive larger rewards.
As mentioned above, Litecoin and Bitcoin use contrasting algorithms for hashing. Bitcoin uses SHA-256 (a 256-bit Secure Hashing Algorithm), which is more complex than Litecoin’s intensive memory algorithm called Scrypt.
Different proof-of-work algorithms require different hardware. This means that if you intend to mind LTC, you should make sure that the system you use is appropriate. Nowadays, Litecoin mining has become much more complicated and requires expensive equipment to create a substantial income.
How to Buy and Save Litecoin (LTC)
So, you want to own some LTC. Mining is not the only option you have to procure this currency. You can also buy LTC from websites called exchanges or trade it for other cryptos such as BTC. Some of these exchanges, as well as other services, also allow you to buy LTC with real fiduciary currency.
If you plan to buy this cryptocurrency, you will need a wallet. A crypto wallet is a unique application or device designed to store cryptographic currency and execute transactions. Note that there is no such thing as a totally secure wallet, but cold wallets are your best option. Cold wallets are devices that stay offline and keep your keys impervious to hacks. If you do decide to buy a hardware wallet, consider that there are cases of massive wallet piracy. This means that you should always buy your wallets from reputable sources. Always remember that due to the decentralized nature of the system no organization or bank will be able to help you.
In other words, the possession of Litecoin, as well as other cryptographic currencies, carries some complexities and risks, and we do not recommend buying any amount of cryptographic money unless you are sure why you are doing it. Learn more here: https://en.wikipedia.org/wiki/Litecoin