As a permanent resident in the top 10 cryptocurrencies by market cap, this digital currency is definitely worth getting to know. In this guide we are walking you through what is Litecoin exactly, how it came to be, and what are some of the key features that this digital currency brings to the blockchain community. Let’s get into it!
What Is Litecoin?
Litecoin is a decentralized digital currency that was launched in 2011, just two years after Bitcoin was unveiled to the world. The cryptocurrency is actually based off of the Bitcoin blockchain, however it carries a few unique features that the founders wished to improve on. While Bitcoin was launched by the anonymous and mysterious Satoshi Nakamoto, Litecoin was created by a team led by a former software engineer at Google and Coinbase, Charlie Lee. With the intention of making Bitcoin more functional in the real world as a medium of exchange, Lee set out to create Litecoin, a faster and cheaper alternative.
Similarly to Bitcoin, the cryptocurrency operates off of blockchain technology and displays all the transactions that take place on the network in the same transparent, immutable manner. In fact, Litecoin is actually a hard fork of the original blockchain, meaning that the blockchain was split into two to create a new network. During the hard fork, the team behind Litecoin implemented several changes to make the network more in line with their vision. These changes included:
Total Coin Supply
While Bitcoin has a maximum supply of 21 million Bitcoin, the Litecoin network increased their total supply to 84 million coins.
Increased Transaction Time
The Litecoin network also increased the time it takes to create blocks on the blockchain. Bitcoin’s block creation time is 10 minutes meaning that it takes 10 minutes for a transaction to get confirmed and added to the blockchain. On the Litecoin network this time was cut by three quarters, with miners able to generate a block of transactions in just 2.5 minutes. Making this better suited to providing day to day payment settlements, and making Bitcoin better suited to a store of value. Mining Algorithm
The developers also made changes to the way in which the cryptocurrency is mined, swapping out Bitcoin’s traditional SHA-256 hashing algorithm for a newer algorithm called Scrypt. Scrypt allows miners to use home computers as opposed to large mining rigs that Bitcoin requires, and generally require less computing power. The process of mining Litecoin is significantly less complex than the process of mining Bitcoin. Miners Rewards
When Satoshi Nakamoto created Bitcoin they included a halving mechanism that halves the amount of BTC a miner receives for mining a block after every 210,000 blocks (roughly every 4 years). This is to manage the amount of Bitcoin entering circulation each year, as well as to keep the currency deflationary over its lifespan. With the halving mechanisms in place it is believed that the last Bitcoin will be mined in 2140. Back to Litecoin, Lee implemented the halving mechanism to kick in every 840,000 blocks.
While Litecoin was designed to improve several of Bitcoin’s functionalities, it was never designed to replace it. Considered to be the most successful hard fork off of the Bitcoin network, Litecoin is affectionately known as Digital Silver to Bitcoin’s Digital Gold.
The Value of Litecoin
Since Litecoin was launched in 2011 it has witnessed returns on investment of almost 4,500%. While Litecoin currently trades at just under $200, the previous all time high was recorded in December 2017 at $375.29. That time frame in the cryptocurrency market was when Bitcoin hit its previous all time high (before the epic bull run of 2020 and 2021). One can always check the current value of Litecoin by checking on Coinmarketcap or looking at a reputable exchange like the Tap app. As mentioned earlier, Litecoin has held its position in the top 10 cryptocurrencies by market cap for many trading cycles and remains a firm favourite in the crypto community.
Lower Transaction Fees
Another benefit to using the Litecoin network is the lower transaction fees. While Bitcoin’s network fees fluctuate with how busy the network is at any given time, Litecoin charges a flat fee that remains fixed no matter what. The fee is set at 1/1,000 LTC and is paid directly to the miner verifying the transaction. Excellent for both local and international payments, Litecoin provides a cheaper and faster alternative to the largest cryptocurrency.
How To Buy Litecoin
If you’re looking to buy Litecoin to add to your investment portfolio, or perhaps use a daily digital currency, you can easily buy Litecoin through the Tap Global app. The platform provides a secure and convenient means of obtaining the cryptocurrency as well as a highly secure storage solution. All trades facilitated by the app go through smart trade technology which scans exchanges and order books around the world to find the best possible price in real time.
Then you can be rest assured that your LTC remains safe with the intricate and innovative wallet design. The platform keeps funds offline in a cold wallet and then uses a liquidity pool hot wallet to immediately facilitate trades. So while your transactions are executed instantly, your funds still remain offline and safe.
Trade Securely, Trade Confidently
As you become more familiar with what is Litecoin, consider using the esteemed cryptocurrency for your trading purposes. The network is run by a great team of developers and holds great promise for the future.