Learn Cryptocurrency
13 Jan 2021

Litecoin (LTC) Everything That You Need To Know

CoinSwitch Kuber

Litecoin is an open-source project and Peer-to-Peer (P2P) cryptocurrency, which is also regarded as the lite version of Bitcoin. Being open-source, its code is readily available on the internet to study and do modifications for their understanding.

It is a result of a fork that happened in Bitcoin in the early decade. Fork or Hard Fork may be referred to as branching of blockchain in two parts resulting in a newer blockchain. It inherited most of the features of Bitcoin and came out as a better cryptocurrency in all regards. With modifications done to its code, it reduced the transaction time to a greater extent and allowed for transactions to take place at a relatively faster rate.

Litecoin was founded in 2011 by Charlie Lee, a former employee of Google. He worked on the code of Bitcoin and made modifications to allow for faster transaction times and majorly transaction fees. Thanks to low transaction fees, users can now transact LTC without burning a hole in their pocket.

Litecoin works on the principle of blockchain technology and cryptography that allows for easy and secure payment methods. Like Bitcoin, Litecoin is decentralized, i.e. it is not controlled by any individual authority (or organization). 

Though there are competitors for Litecoin existing in the market space, it has managed to make a place in one of the Top 20 cryptocurrencies by market capitalization.

Litecoin cryptocurrency

What makes Litecoin Unique?

Even though Litecoin is created out of a hard fork in Bitcoin, it established its presence by clearing Bitcoin’s hurdles, a major one being the transaction speed. The transactions are stored in the blocks, which are then added to the blockchain. The more time it takes to add a block, the slower the transaction speeds. Bitcoin’s block generation time is 10 minutes, whereas Litecoin does it in only 2.5 minutes. This means that Litecoin is able to process 4x more transactions in the same period of time.

Bitcoin has a limited supply of 21 million coins, which is one of the reasons for rising prices. Litecoin, on the other hand, has 4x more supply, i.e. 84 million. This is because the latter is able to add up more blocks in less time. 

Litecoin and Bitcoin use the Proof-of-Work consensus algorithm, but the difference comes from the hash functions, mining speeds, and GPU and CPU power dependence. Litecoin uses Scrypt, which is memory intensive and allows users to easily mine Litecoin from their computers. At the same time, Bitcoin implements the SHA-256 hash function, which is GPU-based, and users need to set up mining rigs for mining.

Let us look at the wide range of differences between these coins best described in tabular form. 

 

Attributes Litecoin Bitcoin
Block Generation Time 2.5 Minutes 10 minutes
Transaction speed High Low
Hash Algorithm Scrypt SHA-256
Maximum Supply 84 Million 21 Million
Block Reward 12.5 LTC 6.25 BTC

Pros and Cons of Litecoin

Litecoin has been a consistent market player since its inception. Backed up by unique features, it surely hits the nail when it comes to appealing to customers. 

Pros of Litecoin

  • Litecoin is traded actively on various platforms, with more than 2 million coins accounting for daily trade. This allows for liquidity across all the exchanges and helps to maintain the price stability of LTC.
  • It is an open-source network that allows anyone to look at the code in any part of the world. It allows for easy changes, which is also the reason for Segwit addition to the protocol for faster transactions.
  • Litecoin can perform 56 transactions per second, while its rival Bitcoin is still stuck on 7 TPS (transactions per second). This allows Litecoin to scale and becomes a speculative cryptocurrency in the market.
  • A major hurdle that other cryptocurrencies face is transaction costs. With thousands of transactions taking place in an hour, Litecoin outstands its competitors with relatively lower transaction fees that could also be a major factor in its wide-scale adoption.
  • Litecoin is reliable as it is a result of a hard-fork from Bitcoin (the Oldest cryptocurrency). Moreover, Charlie Lee, founder of Litecoin, is a former employee of Google. His team constantly pushes the developments and upgrades that bring in the sense of reliability to this cryptocurrency.

Cons of Litecoin

  • It came as a major shock to investors when Charlie Lee sold all of his holdings in 2017 when Litecoin was at high. This raised concerns among people where some investors even began to look for other options.
  • LTC is also one of the most popular cryptocurrencies being used on the Dark Web. It is used to trade illicit goods (or services) and was in talks when the Silk Road inflicted the image of cryptocurrencies.
  • Before 2018, Litecoin was one of the Top 5 cryptocurrencies by market cap, which has dropped down by more than 10 ranks in a span of 4 years.

How to Earn Litecoin?

Litecoin could be earned through two procedures broadly:

  • Mining

Mining is referred to as generating new coins by confirming the transactions happening on the blockchain. The transactions are recorded on the blocks which in turn are added to the blockchain making it an immutable distributed ledger. 

However, this doesn’t allow you to mine coins with your laptop. With more people opting in for cryptocurrency mining, it has been difficult to cope with the power consumption and processing speeds.

  • Investing

Litecoin is considered a very prospective investment vehicle as it has offered more than ten-fold returns in just a year. Since 2017, the cryptocurrency has grown by more than 50X, which means your Rs100 invested would have grown to Rs5000 in just 4 years! Compared to the rival cryptocurrencies, Litecoin has always been the choice of people for earning a little extra.

The developments in Litecoin are made very frequently. SegWit’s addition was proposed for Bitcoin initially in 2015 to help rectify the scalability issues. In 2017, Segwit was tested on Litecoin and proved a huge success. After some time, it was adapted by Bitcoin as well.

How to Buy Litecoin?

Several Decentralized Exchanges or DEX allow connecting buyers and sellers to purchase Litecoin (also referred to as P2P (Peer to Peer) trade). You can also look for someone who already owns Litecoin and wishes to trade. However, this might be a tiring task if you start afresh in cryptocurrencies. 

You might find hundreds of websites on the internet allowing you to easily invest in Litecoin and cryptocurrencies. CoinSwitch Kuber is a website that offers to buy a wide range of cryptocurrencies, including Litecoin. 

Do you want to buy Litecoins in India seamlessly? Do it on CoinSwitch!

Convert your LTC to INR directly here.

CoinSwitch accepts UPI, Netbanking, and leading Debit/Credit cards on its platform. With a simple user interface and quick checkout process, it allows buying cryptocurrencies is a breeze.

FAQs on Litecoin

Q1. What is Litecoin Used for?

Ans. Litecoin is used as a medium of payment and is accepted in a large number of stores, both online and offline. It is also considered a good investment that has given 8200% returns between 2016-2017.

Q2. Is Litecoin a Good Investment?

Ans. This is a very relative answer and depends on person to person. A particular cryptocurrency might look lucrative to someone while it would not be a good investment for others. We recommend you research carefully before investing in any cryptocurrency.

Q3. Is Litecoin better than Bitcoin?

Ans. Litecoin is better than Bitcoin in a number of ways. It has faster transaction speeds, higher block rewards, low transaction costs, and a better hash function. Litecoin was created keeping in mind the problems Bitcoin faced.

Q4. What will Litecoin be Worth in 2021-2022?

Ans. Litecoin is trading at $186* on all cryptocurrency exchanges with $80 returns in just a month. However, we cannot determine the price of LTC as the cryptocurrencies are volatile – fluctuating in value in a short time interval.

Q5.  How much Litecoin has been mined?

Ans. As of today* around 17 million Litecoins have been left to be mined. From a maximum supply of 84 million coins, 67 million Litecoins have already been mined so far.

*Data as of August 24, 2021 

Summary

Litecoin, also regarded as a lite version of Bitcoin, was founded by Charlie Lee in 2011 to counter the shortcomings of Bitcoin. Lee was successful in clearing the hurdles and modifying the code by creating LTC that has faster transaction speeds, lower transaction fees, and higher block rewards.

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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CoinSwitch Kuber

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