Litecoin is a cryptocurrency created in 2011 as an alternative to Bitcoin. It has many functionalities as Bitcoin but with some improvements. Litecoin can be used to transfer value from one business to another or peer to another (P2P). Litecoin transfer times are usually swift and do not require users to check whether they have been processed.
In fact, one of the significant improvements that Litecoin brought about to the Bitcoin network was shorter transaction times. While Bitcoin can also be used to transfer value from one person to another worldwide, Litecoin can do it faster and more efficiently.
In this blog, we will explore Litecoin transactions, how they work, why they’re efficient and fast and how they can be used in the future to make transactions cheaper and quicker.
- Litecoin was founded in 2011 as an alternative to Bitcoin
- LTC was created to provide users with cheaper transaction rates and lower transaction times
- As of October 2021, LTC takes roughly 2.5 minutes to mine one block and $0.1-0.9 per transaction in fees
- LTC is not an ETH or BTC competitor – it is merely an added functionality that is based broadly on Bitcoin’s protocols
- Users can expect their transactions to get verified almost instantaneously compared to BTC and ETH, negligible transaction fees, and ease of use with Litecoin’s blockchain network
What is Litecoin Transaction?
A Litecoin transaction transfers Litecoins from one business to another or from one peer to another to transfer value. Many cryptocurrencies like Litecoin are being used for the same purpose. Over the last few years, Litecoin has expanded its functionalities to include quicker transaction completion times and cheaper rates.
The virtual currency is similar to BTC in many aspects. They’re both coins based on the Proof-of-Work (PoW) consensus algorithm and rely on miners to verify transactions. Litecoin takes about 2.5 minutes to be mined. The rewards on both networks are similar – 6.25 BTC and 12.5 LTC per block.
Litecoin transfer times and transaction efficiency largely depend on how fast miners process the blocks. The LTC is not congested like BTC, blocks are processed fast, and transaction fees are negligible in most cases. Individuals using LTC pay less than $0.01 (roughly INR 0.7) per transaction.
Working of Litecoin Transaction
Litecoin transactions work just like any other cryptocurrency transactions do on the blockchain. Litecoin relies on miners to verify blocks and process them to add transfer confirmations to the blockchain with the Proof-of-Work consensus algorithm.
Here are the steps that the network follows whenever Litecoin transactions are made.
- Suppose you, the user, already have 10 LTC in your wallet. You want to transfer the entire balance to another wallet to pay for a purchase you made. To do this, you must open your wallet application and scan/enter the target destination code correctly.
- Enter the amount you want to transfer. The network shows you the fees that will be applied to the transaction (usually very low). Once you click confirm, the network begins its tasks.
- The wallet you’re using signs your transaction with your Private Key and sends your Litecoin to the destination wallet. The transaction is then sent to all nodes on the LTC network to get propagated and validated.
- Miners include the transaction in the next block they’re supposed to mine.
- Miners use complicated and sophisticated hardware to generate hashes on the network. The moment one miner hits the correct hash on the network, the block gets added to the blockchain, and your transaction gets verified.
- The nodes double-check the transaction and propagate the block with a go-ahead.
- You get a confirmation message from the network notifying you about completing the transaction.
Usually, this is how all cryptocurrency transactions work on the blockchain. This process, however, has been heavily simplified for your understanding. The above procedure applies only to networks and cryptocurrencies that use the Proof-of-Work consensus algorithm.
Litecoin Transaction Time
As we’ve mentioned above, Litecoins’ transaction times are relatively lower than the standards other cryptocurrencies have set for the market. This is attributed to how fast blocks are mined on the LTC network. According to reports, the average LTC block time fluctuates between 2.32 minutes to 2.81 minutes per block. Transfers that required just one confirmation were processed in less than three minutes, while transfers that required three confirmations were processed in less than 9 minutes.
Litecoin has a smaller user base and market cap than Ethereum and Bitcoin. Hence, the network is not that congested. Litecoin, as a result, can process more than ten times as many transactions compared to BTC and ETH. According to reports, LTC processes more than 110,000 transactions per day. This shows that LTC is becoming more valuable for users with each passing day as the number of transactions increases exponentially in the ever-growing financial markets.
Litecoin Transaction Fees
One of the best selling points for LTC is its low fees per transaction. Because currencies like BTC and ETH require a lot of work to approve transactions and get them arranged onto a blockchain, miners’ fees are reasonably high. Most people cannot afford to use these currencies every day because they’d end up paying a considerable percentage of their principal in fees. This creates a demand for cryptocurrencies that are fast and cheap – coins that do not charge significant amounts as fees for every transaction.
Past records and data for LTC show that the transfer fees for this network have fluctuated between $0.0195 and $0.0942 during peak times. These low rates are significant for users who want to send money around the world regularly. The low transaction fees for LTC also makes it a very viable option for everyday usage in stores and the sort.
However, by offering significantly lower transaction fees than Bitcoin or Ethereum, Litecoin does not compete with Bitcoin. Instead, Litecoin works as an alternative mechanism for Bitcoin users to transfer money without burdening themselves with charges.
Track Litecoin Transaction
Litecoins can be tracked on block explorers available on the Internet. You can access one here. Litecoin block explorers can be used to track blocks and their position on the LTC network chain. Usually, a Bitcoin transaction takes about 10 minutes to go through. This is because of the heavy congestion on the network that requires more complex hashes to be generated by miners. The more the miners, the harder it is for them to mine the blocks.
On the Litecoin network, there is significantly less congestion than BTC. Here, it takes roughly 2.5 minutes for one transaction to go through. LTC transactions are much faster and don’t have to be checked for verification repeatedly. They get completed almost instantaneously, and users can regularly reap the benefits of fast and cheap transactions.
Wrapping It Up
Litecoin is an alternative to Bitcoin that can transfer value cheaply and quickly. Litecoin is not a competitor to BTC or ETH. Instead, it is a layer of functionality based on BTC that allows users to transfer coins for meager fees. Litecoin’s transaction times are quiet compared to the competition, making it suitable for large international transactions. Litecoin also takes advantage of the lack of congestion on its network to mine blocks every 2.5 minutes, which increases the rate at which transactions get verified.
Users can expect their transactions to get verified almost instantaneously compared to BTC and ETH, nominal transaction fees, and ease of use with Litecoin’s blockchain network. The potential of this coin in the crypto market is yet to be seen, but experts say that it could become a big deal shortly, taking advantage of ever-growing economies and global trade.
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Frequently Asked Questions
How do I track my Litecoin transaction?
Litecoin transactions get completed within 2.5 minutes of their confirmation. To track blocks on the Litecoin blockchain network, you can visit one of the several block explorers available on the web.
How long does a Litecoin transaction take?
At present, verification of Litecoin blocks takes roughly 150 seconds or 2.5 minutes to complete. This is significantly lower than Bitcoin or Ether, which take upwards of 10 minutes to mine one block.
What is the Litecoin transaction fee?
Transaction fees for Litecoin vary from $0.1-$0.9 depending on market circumstances.
Can Litecoin transactions be traced?
While transactions on the Litecoin blockchain are available to all nodes connected to the network for verification, tracing the origin of the transaction back to the user or the computer is next to impossible due to SHA256 encrypted Private Keys.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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