Litecoin is a peer to peer currency and an open source software platform launched under the license of MIT/X11. It inspiration arose from the similar Bitcoin, the creation of Litcoin and transfer is based on a protocol of an open source and it is decentralized in control. The idea behind Litecoin by its developers was to enhance upon Bitcoin, it provides various key diferences. As of Nov. 2013, Litecoin had been spread by Medias with institutions like Wall Journal, CBNC, and the New York Times making citations that’s similar to Bitcoin which may possibly be successor. In the cryptocurrency market capitalization, Litecoin is the second largest.
Learn more about litecoin
What is Litecoin?
This is a form of Internet currency that works on a peer-to-peer network structure, allowing you to make immediate payments anywhere in the world with low or no fees. It is completely decentralized without any kind of regulation by any authority. It is a payment method that is established globally. Due to the use of mathematics, the network remains secure and individuals are empowered to completely control their finances. There is better storage efficiency along with faster transaction confirmations than other traditional forms of payments. It is a medium of commerce which is quite complimentary to the more famous Bitcoin. It has been increasing in industry support, liquidity and trade volume.
How was Litecoin formed?
It was released on October 7, 2011 by a former Google employee by the name of Charles Lee, through the use of an open-source client. It was quite similar to Bitcoin, but with several differences such as increased number coins, along with a different hashing algorithm, a different graphical user interface (GUI) and reduced block generation time.
The first difference is that the network of Litecoin processes a block within 2.5 minutes, as compared to the 10 minutes processing time of Bitcoin’s block. Therefore, this will lead to faster transaction outcomes. However, this means that there would be increase in the number of blocks that are orphaned along with an increased size of the blockchain, which can be potential drawbacks. However, there is great resistance to the spending attack.
The second difference is that it is uses a memory-hard function algorithm, which is in the form of a script.
Furthermore, another difference includes the fact that it is able to produce 84 million litecoins, which is four times more than the currency units which are issued by the Bitcoin network.
However, because Litecoin uses scrypt algorithm, this means that mining Litecoins are more difficult and ultimately more expensive, as well.
How do transactions occur?
The transactions are first recorded in a ledger which most clients have access to, known as the Litecoin blockchain. Within the blockchain, a new block is added after every 2.4 minutes. This happens whenever there is enough hash value found in the proof-of-work scheme. This means that every transaction is completed after six blocks or within 15 minutes. However, when smaller transactions are involved, fewer than six blocks would also be ideal.
Where is the money stored?
The money is stored in the wallets, which are in the form of Litecoin-QT for Windows, Mac and Linux. It is a form of offline wallet. There is an Android wallet now, as well, which was released in 2014. There are less security issues than the previous version.
Should you buy Litecoins directly and sell them at a profit?
If you feel that the value of Litecoins are about to increase in value, and you tend to be a person that likes to take risks, then you should buy some Litecoins and then sell them later at a profit. When you buy digital currency, you can get more of it in one go, without needing a mine rig to produce the litecoins for you. Later, when the value increases, you can sell them in the market.
However, mining is still a safer option.
What will be the total number of Litecoins?
The total number of Litecoins that will be produced after mining would be around 84 million, meaning that there would be more Litecoins than Bitcoins. Therefore, this might lead to more liquidity whereas it might also mean less value for the Litecoin. You need to understand that liquidity is not going to be necessarily true because they can be divided into smaller fractions. Nevertheless, people can still use it for other services, which means that they might be more readily used.
What is the proof of work for Litecoins?
The proof of work is the difficulty that is involved in the processing of something. It is difficult to create a market for mining. You can use Litecoins with traditional computers, without the use of additional hardware. However, this will change when there is more Litecoins being produced which will require more proof of work for Litecoins to be mined.
Is it easy to access Litecoins?
It is not as easy to access Litecoins as Bitcoins. The method is still quite similar to the option of cash. BTC-E offers majority of Litecoins, and this is a Russian exchange. An intermediary might need to be used such as Perfect Money, which can become expensive because the fee is quite high. You can also exchange Bitcoins for Litecoins, which is a method that has become extremely popular. Since it is a separate network, even if Bitcoins do not work or become redundant, Litecoins would not necessarily become so.
How do I make my wallet more secure?
You can make the wallet secure through wallet encryption that allows you to enter a password before actually spending your Litecoins. You can view your balance and transactions without the password though.
Therefore, this would provide protection against viruses such as Trojan as well as provide a sanity check before conducting transactions.
Is the software open?
Because the structure is decentralized, the source code is readily available to everyone in the market. The software is also released openly which is also open to independent verification.
Will Litecoins outrun Bitcoins?
Right now, nothing can be said for certain. Because of the faster speed, Litecoins do have more advantage than Bitcoins, but there are some definite delays in the way that Litecoins can be accessed at this moment in time.
Should I think about Litecoins?
If you want to be slightly more risk-taking, then Litecoin is an excellent option for you. You can use it for different goods and services, just like Bitcoins can be used.