Introduction to Litecoin

Since Bitcoin’s inception a decade ago, a lot of different cryptocurrencies (also called alternative coins – often shortened to ‘altcoins’) have emerged. At its peak almost two years ago, Bitcoin was valued at $20,000. Today, its value has reduced to $12,000 (as of July 9, 2019). While many have been discouraged, thinking the opportunity to earn hundreds, if not thousands, overnight has passed, some are still holding hope that they will find an altcoin investment that will yield similar gains. Litecoin was created to be the ‘silver’ to Bitcoin’s ‘gold.’. Its creator, Charlie Lee, developed the altcoin with lower transaction costs and easier ability to mine in mind. For this reason, Litecoin has become a staple in the cryptocurrency world. Let’s take a look at some facts about Litecoin to determine if It’s a worthwhile investment.

1. 1. The background of its founder

Litecoin was founded in October of 2011 by a former Google software engineer, Charlie Lee. The way it began was actually as a fork of the Bitcoin core client. He created the altcoin to address some of Bitcoin’s problems, namely high transaction costs, slower transaction time, fewer number of coins, and many more.

1. 2. Litecoin versus Bitcoin

In order to distinguish the likes of Litecoin and Bitcoin properly, it is often said that Litecoin is the silver version to Bitcoin’s gold. In other words, these two cryptocurrencies are very similar and both are growing rapidly and are very valuable. For a more detailed explanation, check out the article ‘BTC vs LTC.

1. 3. More blocks, less time

Unlike Bitcoin, Litecoin is able to produce a single block in less than three minutes. Bitcoin can take up to ten minutes to create a block. But what does this mean for its users? The time it takes to create a block correlates directly with the time it takes for a transaction to be completed. In other words, while Litecoin will have a fairly easy time allowing transactions to swiftly be fulfilled, Bitcoin is stuck taking four times as long to do the same work. When it comes to urgent situations, last minute transactions, or smaller purchases, this starts to become more of a problem. This is due to the fact that sometimes, merchants or consumers simply don’t have the time to spare.

Now, when you’re used to the speed of online banking transactions, which take 3-7 days for international money transfers, anything less than a week-long processing period is something that you become grateful for. When it comes to the virtually instantaneous processing times of cryptocurrency transactions, however, the difference in processing from one cryptocurrency to another is a matter of minutes.

Although this would not be noticeable or matter at all to most of us considering what we are used to, transaction processing speed is a very important matter for most merchants. The faster, the better, because a difference of a few minutes could mean a substantial rise in both profit and convenience for businesses.

While Bitcoin takes about 9 minutes on average for a transaction to be completed, Litecoin takes only 2 and a half minutes to complete a transaction. A 6.5-minute difference may not seem like a lot but if you put it into perspective by considering what it is used for as well as the advantages merchants stand to gain from this comparatively miniscule waiting period, Litecoin has a very clear advantage.

1. 4. Simplified mining

Litecoin uses a much more straightforward and basic algorithm than most cryptocurrencies. This algorithm is called Scrypt. It allows for mining to be carried out on far less expensive, less powerful computers, which is also a benefit when it comes to your electricity bill. This is a huge benefit of Litecoin considering the fact that the biggest disadvantage of mining has been the price of pursuing coins this way.

Between the price of incredibly powerful computers that even allow for mining, the tireless hours of work that are put in, and the electricity bill that results from supporting such expensive computers, mining bitcoin is no longer a task worth pursuing. The reason for this is that the reward of bitcoins that would be expected from mining is no longer guaranteed. It is now a bit like a raffle, with only a few lucky investors being compensated for their work, money, and time.

1. 5. Facts and figures

Litecoins in existence, both mined and those yet to be mined, reach 84 million coins. This is exactly four times the number of minable bitcoins in existence. Due to the fact Litecoins are greater in number than the total amount of Bitcoins, they are able to be sold at a considerably lower price per unit. So, one advantage of Litecoin is the fact that you are able to own more whole units for less money than you would spend on fractions of a Bitcoin.

1. 6. More secure than most

By using the Scrypt algorithm rather than a more simplified and therefore more easily penetrable algorithm, Litecoin maintains a more secure barrier between its cryptocurrency and the hackers attempting to access it. It is not only the Scrypt algorithm that allows Litecoin to remain more secure, however. Litecoin is also more secure due to the fact that mining Litecoin involves complex mathematical problems and equations. Attempting to solve these problems and equations would become a time-consuming and fruitless task for a great majority of hackers.

As this cryptocurrency is more difficult to mine, a rather limited amount of people are able to pursue the mining of a Litecoin. I’m not sure if this would be considered a downfall of Litecoin, however, because when it comes to cryptocurrency, a high level of security keeping your digital currency safe is of utmost importance above all else.

Conclusion

Litecoin, over the years, has become a staple in the cryptocurrency world. It has always ranked within the top 5 cryptocurrencies capitalizing the cryptocurrency market and has avoided major hacking incidents. It was created to improve Bitcoin’s issues and with all the improved features it has, it can be deemed a worthwhile cryptocurrency investment.