What is Litecoin LTC?

LTC is the result of a so-called hard fork. A basic distinction is made between soft fork and hard fork , with the second option being the more radical variant.

A soft fork involves a software protocol change that invalidates previously valid transaction blocks. Old nodes can see the new blocks and therefore soft forks are backwards compatible.

All that is required is a majority of miners to make this upgrade and apply the new rules.

Litecoin - the Bitcoin alternative?

Already in the development phase, Charlie Lee had the ambition to make Litecoin the silver of crypto space. For comparison, he and other experts categorized Bitcoin as digital gold.

Back then, Lee described LTC as the money for the internet age and had launched the project with the intention of creating a peer-to-peer internet currency that would enable virtually instant and de facto free transactions around the globe.

During the formation phase of LTC, Bitcoin was able to record enormous price jumps and reached an interim all-time high of almost USD 30 per Bitcoin in June 2011. However, it was not as easy to acquire Bitcoin back then as it is today.

Crypto exchanges were the exception at the time and the mining process also became more complicated. In view of these developments, many investors assumed at the time that they had missed the big hype and Litecoin came in handy as an alternative for many at the time.

In retrospect, Litecoin is a BTC clone. However, one must be aware of its importance at the time. Cryptocurrencies were still in their infancy in 2011 and there weren't yet big development teams with huge budgets working on new projects.

With what we know today, one can definitely say that Lee was successful with his project. LTC has been in the top 10 most valuable coins for more than 500 weeks. The fact that you could easily mine Litecoin on your computer at home was also a reason for the success.

What problem is Litecoin addressing?

Litecoin's main focus is to be a fast, cheaper alternative to Bitcoin. The cryptocurrency was created around 11 years ago at a time when there were not thousands of different cryptocurrencies like there are today.

Charlie Lee decided to increase the block size compared to Bitcoin. In addition, LTC has a block confirmation time of 2.5 minutes, while BTC has this value of 10 minutes. Each transaction is also stored on the blockchain.

With regard to the scalability of cryptocurrencies, a comparison is often made with payment service providers such as VISA or Mastercard. VISA currently carries out around 2,000 transactions per second, with Litecoin the figure is 56 transactions per second.

Nevertheless, LTC has the edge compared to Bitcoin, as the BTC blockchain can only carry out 4.6 transactions per second.

Because Litecoin is so similar to Bitcoin, there is no official white paper for this cryptocurrency. Rather, it is a modified version that also has better scalability due to its properties.

Scrypt as proof-of-work algorithm

Probably the most important difference between Litecoin and Bitcoin is the algorithm used for the Proof-of-Work consensus model. The proof-of-work algorithm is a computational task that the network must solve to verify a block of transactions.

Scrypt was developed by Colin Percival back in 2009 and, unlike Bitcoin's SHA-256d algorithm, aims to reduce hardware scalability.

A considerable amount of storage capacity is required for the computing processes. This leads to lower efficiency and reduces the incentive to develop specific hardware such as Application Specific Integrated Circuits (ASIC).

Accordingly, it can be said that Litecoin is more decentralized than Bitcoin in terms of this aspect. By using Scrypt, the developer wanted to counteract centralization of mining and even if ASICs are used in the future, the algorithm has at least delayed this development significantly.

Differences to Bitcoin

Although Litecoin was and still is in the shadow of Bitcoin, LTC has a few advantages in contrast to the industry leader.

While Bitcoin was the world's first cryptocurrency, Charlie Lee made improvements to the code. Accordingly, Litecoin has a few advantages that are extremely relevant for users. The main advantages of Litecoin include:

• Lower transaction fees
• Faster transactions
• Easier mining through Scrypt algorithm

In order to get a concrete idea of the advantages, we will go into a little more detail at this point. The lower transaction fees of the cryptocurrency are particularly noticeable here. Currently, these are USD 8.43 for a Bitcoin transaction.

In comparison, LTC’s transaction fees are currently just $0.0024 and are therefore of course many times lower than Bitcoin. A few relevant differences can also be seen with regard to the maximum number of the two cryptocurrencies.

The industry leader Bitcoin has a maximum number of 21 million coins, while there will be a maximum of 84 million Litecoin. Just like Bitcoin, so-called halvings also take place in the LTC blockchain.

As with Bitcoin, LTC miners receive rewards of 12.5 LTC per block. The last halving took place in the summer of 2019, the amount of the rewards was halved and there will be further halvings until the last of the 84 million LTC has been mined. There are now more than 66 million Litecoins in circulation.

Of course, the four-yearly halving of the reward also affects the Litecoin price . The Litecoin forecast for the coming years also looks very positive, especially since the next halving will take place in 2023.

How does the Litecoin blockchain work?

Because Litecoin is a fork of the Bitcoin blockchain, it is basically based on the same blockchain. Just like the "big brother" Bitcoin, Litecoin also works on the principle of the proof-of-work principle.

The difference here, however, lies in the aforementioned Scrypt hash function. Originally, the developer even promised that using Scrypt would make it possible to mine Litecoin and Bitcoin in parallel, but this is actually not the case.

Litecoin is basically based on the code of Bitcoin and Charlie Lee has only slightly adapted and changed the protocol. Therefore, we want to refer to our detailed article on "What is Bitcoin" at this point. There we go into the basic functionality in more detail.

What is a litecoin wallet?

Litecoin is a peer-to-peer virtual currency that allows you to make transactions around the world with a commission that is almost zero. Simply put, Litecoin (LTC) is a global payment system that is decentralized and does not have any control from states.

That is, a special cryptographic cipher completely protects the network and allows users to manage their own money. The digital currency stands out in that it takes less time to complete financial transactions than the more well-known Bitcoin. In addition, in terms of liquidity and trading volume, Litecoin is a reliable auxiliary tool for commerce related to the Bitcoin currency.

Benefits of litecoin wallets

Compared to other payment systems, Litecoin has a lot of advantages that allow it to stand out from other wallets:

Convenience

A Litecoin wallet is preferred by almost every person who is engaged in mining the most popular cryptocurrencies. And this is not surprising because Litecoin has the following amenities:

• The website has no massive complaints or reputation issues. Additionally, it has a high degree of reliability.
• In order for a person to acquire his own wallet, you need to go through a simple registration procedure.
• The interface of the online wallet is extremely simple and understandable for every user.
• The ability to make payments automatically, as well as remotely manage your own account and receive detailed information about completed transactions.

Additionally, the user independently decides which resource to use, which noticeably distinguishes the WEB wallet from others.

Instant exchange

Despite the fact that Litecoin was created on the basis of the Bitcoin crypto cipher, it cannot be called a coin that differs from the most popular currency only in name. In fact, Litecoin is a light version of Bitcoin. The main feature of this coin is that it eliminated the main flaw that Bitcoin had, namely the scaling problem.

Additionally, thanks to the use of SegWit support, the number of transactions per minute has increased significantly. Litecoin allows you to instantly exchange currencies, as well as transfer funds anywhere in the world. Based on this, using Litecoin is more convenient than bitcoin, the throughput of which is quite low.

Anonymity

Litecoin is among the best payment systems precisely because of its anonymity. It is achieved through the following components:

• Unlike various payment systems and bank accounts, the LTC wallet is not tied to the user's identity at the protocol level. Accordingly, a person at any time can create as many wallets as he wants. At the same time, no one will ask for personal data from him.
• Transactions are not attached to the identity of the user. Therefore, if users have agreed to include a financial transaction in a block, then each participant can transfer LTC from one address to another without the need to provide personal data. That is, as with the transfer of cash, the sender does not need to know the recipient and vice versa.
• Litecoin transactional data is transmitted by P2P network nodes, which were randomly selected. Therefore, it is almost impossible to track from which wallet the money was sent and to which it should come.

Security

The single-guarantee nature of an LTC wallet allows you to completely exclude hacking by anyone. All transactions are completely transparent, and fraud attempts are recognized and stopped at the very first stage of the transaction.

Theoretically, hacking the payment system is possible, however, if more than half of the users of the LCT network transmit false information during the verification process. To do this kind of work, attackers need to have extraordinary mental abilities and computer technology, the power of which should be much higher than all supercomputers that exist today.

How to create a litecoin wallet?

Everyone can get their own LTC wallet. This can be done in several steps in two ways.

On the computer

To create an electronic wallet on a computer, you need:

• Download the program from the official website litecoin.org.
• Log into the program.
• Select the "Registration" section.
• Then, enter your email and password.
• Click "Open Account".

After following the instructions, the Litecoin wallet will be installed on the computer.

Online wallet

Registration of an online wallet is carried out as follows:

• Go to Cryptonator.com
• Click on the inscription: "Open an account."
• Enter email.
• Next, you will receive an email notification with a link.
• Follow the link.
• Then you need to enter your email and come up with a password.
• Choose cryptocurrency
• Next, click "Open Account".

After that, you can earn or mine coins and transfer to your Litecoin wallet.

Litecoin exchange

Converting LTC to ordinary money and vice versa is possible only through special exchangers. In general, this procedure is performed according to the following algorithm during execution, which is necessary:

• Enter the cryptocurrency exchange.
• Register your account on it.
• Transfer coins from Litecoin wallet to it.
• Exchange for current currency.
• Enter your Visa/Mastercard number.
• Transfer money to it.

Naturally, the exchange will charge a commission for the procedure of replenishing or withdrawing funds from a crypto wallet, which varies from 0.1 to 1% of the total amount.

Advantages and disadvantages

Using an LTK wallet, the user receives a number of advantages. Namely:

• To install a wallet, you do not need to install special software.
• A high level of security is ensured when making various financial transactions.
• Complete anonymity.
• The payment system can be managed from anywhere where there is internet.

However, in addition to the advantages, the system has disadvantages. Namely:

• The loss of a web wallet will lead to the complete loss of the crypto currency that was stored on it.
• Confidentiality allows you to finance terrorism with impunity, pay for the supply of weapons or drugs.
• The lack of statistics does not allow you to predict the rate of the coin.

Alternatives

Considering that today the number of digital currencies is constantly increasing, Litecoin is no longer the only crypto currency with many advantages. The following coins are an alternative to it:

• XRP.
• Quarkcoin.
• And other types.

However, despite the emergence of new, more advanced types of coins, LTC will be in the top 5 best cryptocurrencies for a long time to come.

Nuances and possible problems

Before financing in LTK, it is worth remembering that despite all the degrees of security, you can lose your own wallet and the money that is stored on it. As a rule, attackers use several methods to get the login and password from the web wallet. Namely:

• Infect your PC with a virus.
• They create a copy of the official website of the cryptocurrency or exchangers, where the user enters his data.

Therefore, to avoid such troubles, it is recommended:

• Install a good antivirus and firewall (or better, register an online wallet).
• Always look at the address bars of sites, they should start with "https://" and not have extra letters.

By adhering to simple rules, the user is unlikely to fall for the tricks of scammers.

Litecoin is a reliable system that allows you to quickly and anonymously make transactions anywhere in the world with a minimum commission. In addition, the value of the coin begins to rise. However, due to the fact that the cryptocoin is becoming very popular, it will begin to attract a huge number of users. That is why, in order not to miss the benefit and how to make money on the LTK, you need to start working with it now.