What Is Litecoin (LTC)? | The Silver to Bitcoin’s Gold
What is Litecoin?
Litecoin (LTC) is a decentralized peer-to-peer cryptocurrency that was released on October 7th, 2011 and went live on October 13th, 2011. It's similar to Bitcoin but with more coins in circulation, shorter verification period, and different hashing algorithm.
What are Litecoins?
Litecoins (LTCs) is a decentralized peer-to-peer cryptocurrency that was released on October 7th, 2011 and went live on October 13th, 2011. They're similar to Bitcoins but with more of them in circulation, shorter verification periods, and a different hashing algorithm.
Is Litecoin better than Bitcoin?
It depends who you ask. Litecoin has lower transaction fees, quicker transactions, and more decentralized mining. However, it hasn't been tested as much as Bitcoin and currently also has less adoption.
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What Is Litecoin?
Litecoin (LTC) is a decentralized peer-to-peer cryptocurrency that was released on October 7th, 2011, and went live on October 13th, 2011.
“The silver to Bitcoin’s gold. Bitcoin’s little brother that doesn’t get out much.”
These are just a few of the things you might hear getting tossed around when crypto enthusiasts talk about Litecoin. At first glance, Litecoin doesn’t garner much respect as a top 10 market cap cryptocurrency. However, once you get into the weeds, Litecoin presents an extremely useful and interesting application of the original Bitcoin blockchain. For all the flak Litecoin gets, it’s easy to overlook what it actually is, and what functions it serves.
In this guide, we’ll cover the following sections of the project. Skip to a particular one if you prefer to get straight to it:
The Low-Down on Litecoin
About Litecoin
Trading History
Where to Buy LTC
Where to Store LTC
Conclusion
Additional Resources
The Low-Down on Litecoin
Former Google employee Charlie Lee founded Litecoin. It was one of the first forks of the Bitcoin core client. It was proposed as a solution to some of the bottlenecks and scalability issues with Bitcoin, most notably the number of transactions that could be processed within a given time frame. The edge Litecoin has over Bitcoin is that the payment transaction costs are extremely low, and it is capable of facilitating payments around four times as fast.
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The Silver to Bitcoin’s Gold
There’s a reason Litecoin receives a lot of comparisons to Bitcoin. Except for a handful of minor distinctions, Litecoin serves the exact same purpose as Bitcoin. After all, it was one of the first Bitcoin forks.
bitcoin vs litecoin
Litecoin was one of the first Bitcoin forks.
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Comparing Litecoin to Bitcoin not only makes sense from a convenience point of view, but it also lets us zone in what makes it different at a technological level. Litecoin is meant to be used as a peer-to-peer cryptocurrency. It is actually able to accomplish the same job Bitcoin does at a faster and cheaper rate.
Speed
Transaction confirmation speeds play a huge role in how quickly a currency gets adopted. Bitcoin confirmations usually take around ten minutes with periods as high as 2,548 minutes. Litecoin’s network is able to confirm transactions at a much quicker rate.
Litecoin’s verification period lasts a fixed 2.5 minutes. For every individual Bitcoin block that gets confirmed, four Litecoin blocks of equal size get confirmed.
Cost
The cost of sending any denomination of LTC costs around $0.02, whereas Bitcoin currently hovers around $0.35. The costs are all but negligible currently, however, during peak traffic, Bitcoin transaction costs appear to rise quite dramatically. This is an immediate advantage for small transactions since splitting a $10 Uber with a friend doesn’t make sense for most people if you have to pay $5.00 on top of that. Litecoin offers the option to pay for everyday goods without high fees that start to add up very quickly.
Mining
One of Litecoin’s goals is to distribute hash power more evenly than Bitcoin’s network. This includes mining pools, mining groups, and a much smaller (and less decentralized) subset of miners. Litecoin aims to keep the hashing power decentralized.
Litecoin’s mining also keeps transaction fees relatively low due to the inherently higher total supply. There can only be 21 million Bitcoins in existence, whereas there can be up to 84 million Litecoins. This matters because it makes mining less competitive, and the more competitive mining gets, the higher the transaction fees.
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While Bitcoin is dealing with some serious scalability issues due to its high transaction fees, Litecoin, in theory, is able to churn out block after block and retain its lower transaction costs. Granted, not as many people are using Litecoin as they are Bitcoin and could theoretically end up dealing with the same scalability issues if it were to experience similar growth and usage, but that simply just isn’t the case yet.
Litecoin also uses the Scrypt hashing algorithm that utilizes much less processing power than the Bitcoin SHA-256 hashing algorithm. Placing a higher emphasis on utilizing high-speed RAM, Litecoin makes it much less possible for a single player (or small collective group of big players) to dominate the mining world.
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About Litecoin
History
It’s important to look at the differences in how both Bitcoin and Litecoin came about. The origins of Bitcoin’s founder are relatively shrouded in mystery. Satoshi Nakamoto (the pseudonym of Bitcoin’s founder) is essentially relegated to legend and myth.
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Litecoin’s founder, on the other hand, has been publicly available and active in the community. You can find Charlie Lee on Linkedin or on Twitter, as @SatoshiLite. After working at Google and founding Litecoin, he also worked on the engineering side at Coinbase, one of the largest cryptocurrency exchanges in the world.
Lee appears to have an accessible and open nature compared to the mysterious secretive Satoshi. The fact that Lee is capable of making light (Lite) of the situation is very humanizing. Additionally, you’d be hard pressed to find any serious claims or illusions of grandeur within the Litecoin camp. It’s meant to make cryptocurrency accessible and usable for everyone and is perfectly fine with taking a back-seat role to Bitcoin.
The fact that Litecoin can hold its own weight when it comes to having a legitimate use case says a lot, especially in a cryptocurrency world with over 700+ alt-coins with dubious purposes. It does, after all, hold a market cap of upwards of $1.8 billion. That doesn’t just happen by dumb luck.
However, to be fair, users haven’t pushed Litecoin to its limits because there simply aren’t that many people using it. For the time being, Litecoin does exactly what it was created to do: offer low-cost, speedy transactions in a way that Bitcoin couldn’t.
Competition
When compared to Bitcoin, which has a market cap about 33x bigger, Litecoin does pose several advantages. As listed above, it’s capable of offering users lower transaction fees, faster transaction processing times, a more decentralized mining network, and its founder even throws out the occasional zinger on Twitter. These advantages technically make Litecoin a better coin for the vast majority of small transactions.
Charlie Lee [LTC⚡]
Litecoin is no better suited for low value payments than Bitcoin is. And if we must use an altcoin for that, I prefer BCH.
25 600 people are talking about this
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Trading History
Litecoin originally started gathering attention during its explosive growth in November 2013, where it saw a near 15x spike in price. This jump in price, however, was short-lived and Litecoin hovered around the $4 per LTC range for about two years. It wasn’t until May 2017 that it started to pick up steam again during a time where generally all cryptocurrencies experienced massive growth.
The price topped out at around $350 at the end of 2017 and the range-bound process seems to be playing out again. If history is anything to go by we may see prices dwindle for a year or two before the bulls return.
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Litecoin has also been relatively innovative, adopting new technologies such as Segregated Witness and carrying out the first Lightning Network transaction that sent 0.00000001 LTC from Zurich, Switzerland to San Francisco, the USA in under a single second.
On a more controversial note, Charlie Lee reported that he sold all of his Litecoin holdings at the end of 2017. At the time, some community members had questioned his commitment to the project. This move was either pure genius or dumb luck from a trading perspective considering he timed the market to almost perfection. Smart investors may want to pay attention if he ever decides to buy back in.
Where to Buy Litecoin
Exchanges both large and small sell Litecoin so you shouldn’t have any problems picking up some. It is particularly popular in Asia on exchanges like OKEx, Bibox, and Huobi. If you’re looking for something a little closer to home you can grab some on Bittrex or Coinbase.
Where to Store Litecoin
Because of the wider adoption of LTC, there are quite a few ways to store it. If you are storing a large amount your best bet is always to go with a hardware wallet like a Ledger Nano S or Trezor. If you plan to trade it regularly and/or use it on a daily basis there are some more convenient options. You could go with the official desktop wallet for Windows, Mac, and Linux.
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If you’re on the go you’ll probably want something more mobile like the Jaxx wallet or LoafWallet. Keep in mind that many exchanges provide mobile wallets, though you don’t actually hold your own private keys.
Conclusion
LTC is simply another cryptocurrency that just so happens to prove its use-case as a low-cost decentralized peer-to-peer payment method.
It was never made to go head to head with Bitcoin but its technological advantages do pose somewhat of a threat. While it might be theoretically “better” than Bitcoin, Bitcoin has already run off with the network effect of rapid onboarding a much larger and active user base.
Bitcoin also has the benefit of being a near household name by now, whereas Litecoin is much more obscure (especially as new tokens get added to the space regularly). The vast majority of people who jump into the cryptocurrency world will buy Bitcoin first. If their hunger isn’t satiated they may also grab some Litecoin and Ethereum too.
Adoption
While it seems to function very well for what it’s meant for, it’s interesting to consider situations where it could experience massive user adoption and growth. There isn’t much meat on the bones of whatever loyalists are chewing on, but it’s worth noting that it could only be a matter of time before more people start to add Litecoin into their portfolios.
If, and this is a big IF, Bitcoin isn’t able to address its scalability issues, Litecoin will be there to at least offer the same utility without having to pay high (and if Bitcoin reaches the climax of its scalability problems – extremely high) fees.
Until then, Litecoin will likely hang around the top ten market-cap cryptocurrencies, doing the same thing it always has.
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What Is Litecoin? What to Know in 2019
TheStreet
It's certainly been an interesting few months for cryptocurrency.
Bitcoin dropped more than 30% toward the end of November, putting it at new 13-month lows. And while crypto has been taking a bit of a hit recently, it remains a pseudo-currency that many investors are bullish on. However, when in the market for cryptocurrencies, you aren't limited to just Bitcoin. In fact, among the some 180 cryptocurrencies on the market, Litecoin is one of the biggest "altcoins" on the market.
So, what is Litecoin, and how do you buy it?
What Is Litecoin?
Litecoin is an online cryptocurrency that ranks as the third-largest cryptocurrency on the market behind Bitcoin and Ripple. The currency trades on many digital exchanges and wallets, and has a higher circulating supply of coins than Bitcoin. Litecoin was created by Charles Lee in 2011 and has a coin limit of 84 million.
Just like other cryptocurrencies, Litecoin functions as a payment system similar to fintech companies like PayPal (PYPL - Get Report) in that it allows users to pay with or trade the currency.
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The former Google (GOOG - Get Report) engineer created Litecoin under MIT/X11 lісеnѕеѕ, basing the coin off of Bitcoin's original code and earning it the title "altcoin" (alternative coin to Bitcoin).
Since coming to market in 2011, Litecoin hit a peak price of $360.93 in December 2017 - up an astonishing 8200% from its previous price of $4.40 the year before, according to Forbes. And due to its similarity to the original Bitcoin, Litecoin is often referred to as the "silver" to Bitcoin's "gold."
Litecoin Features
There is certainly no shortage of options when it comes to different cryptocurrencies to own or trade. But, what makes Litecoin different?
Algorithm and Mining
Litecoin uses a proof-of-work algorithm (much like Bitcoin) called Scrypt. The algorithm produces coins at four times the speed of Bitcoin's algorithm, despite being modeled after the pioneer coin. Litecoin's algorithm has a transaction processing speed of respective coins at a rate of one coin every 2.5 minutes.
The coin's algorithm uses computing power to process transactions, which are completed by "miners" confirming transactions in their networks with their computing power. As a result, the miners receive coins in exchange. Additionally, Litecoin's Scrypt algorithm is generally considered to be very efficient given that it prevents too much customization with hardware solutions like Application-Specific Integrated Circuits (ASICs), and favors high-speed random access memory. For this reason, Litecoin's Scrypt algorithm is generally considered easier for regular cryptocurrency users to be able to mine without too much complexity because it allows miners to use CPUs (central processing units) or GPUs (graphics processing units).
Market Capitalization
The coin's market cap sits at around $1.75 billion as of 2018. Litecoin's circulation is currently 59.61 million.
As of December, 2018, Litecoin is priced at around $28.
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Total Coins
Just like with other cryptocurrencies, Litecoin has a limited amount of coins that can be mined. Litecoin can produce up to 84 million coins - more than Bitcoin.
However, Litecoin (like other cryptocurrencies) can be divided down to trade or buy in smaller amounts, so the importance of total coins has somewhat diminished.
Rewards
When cryptocurrency miners mine a block of any given currency, they are rewarded with a certain number of coins. Litecoin miners are rewarded with current block rewards of 50 LTC (2014).
However, Litecoin rewards are halved every 840,000 blocks, but due to Litecoin's average processing speed of about 2.5 minutes per LTC, it takes years for the rewards to be halved.
Litecoin Exchanges and Wallets
If you're looking to buy, sell or trade Litecoin, you're going to need a platform. So, where can you buy or trade it?
Cryptocurrency exchanges are places to buy and sell crypto. But before using any exchange or wallet, be sure to do your research to avoid any scams or hacking. Better safe than sorry.
Exchanges
There are a fair amount of exchanges that offer Litecoin in addition to other cryptocurrencies like Bitcoin.
One of the larger exchanges that has Litecoin is Coinbase - which offers a variety of other cryptocurrencies in case one isn't enough. Additionally, the Cameron and Tyler Winklevoss-owned exchange, Gemini, also offers Litecoin - which can be bought with USD. As a plus, you can also buy Litecoin with BTC (Bitcoin) or ETH (the coin for Ethereum). The creator of Litecoin celebrated the addition on Twitter (TWTR - Get Report).
Charlie Lee [LTC⚡]
With the launch of LTC on Gemini today, every single major Bitcoin exchange supports Litecoin. Mission accomplished!
Twitter Ads info and privacy
You can also buy, sell or trade Litecoin on Binance or Bitfinex - both fairly large and widely used cryptocurrency exchanges.
Wallets
Once you've decided on an exchange to use, you're going to need a wallet to store your LTC. So, what are your options?
Cryptocurrency wallets have a variety of forms and uses - including hardware, desktop, software, mobile and paper. You may wish to store your cryptocurrency in an easily accessible wallet, or, you might want to store it in a safe, offline storage place.
Hardware wallets like Trezor offer a good, offline place to protect your cryptocurrency from hackers. Among the other 500 cryptocurrencies, Trezor supports Litecoin.
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However, if you're looking for easy, online access to your coins, go with Jaxx or Exodus as a wallet. Jaxx offers both desktop and mobile interfaces that allows you convenient access to your Litecoin. Additionally, Exodus (along with being a wallet) also has an exchange as part of its services.
But, what about Litecoin might make it a better choice for you than other cryptocurrencies? Or, at the very least - what's the difference between Litecoin and other cryptocurrencies?
Litecoin vs. Bitcoin
Bitcoin famously paved the way for other cryptocurrencies back in 2009, when it was created by an unknown individual by the alias Satoshi Nakamoto. And unlike Litecoin, Bitcoin remains the most popular cryptocurrency with a value of over $3,519 (although it recently plummeted from around $6,000).
However, there are several key differences between Litecoin and Bitcoin apart from their value.
The two cryptocurrencies use different algorithms and have different mining specifications. While Litecoin uses a less complex algorithm called Scrypt, Bitcoin uses a traditional SHA-256 algorithm (which is a cryptographic proof-of-work algorithm much like Litecoin's). However, Bitcoin's algorithm is widely known for being more complex and stresses processing power - using what are called Application-Specific Integrated Circuits (ASICs) - hardware systems that can be customized for mining a specific cryptocurrency like Bitcoin. Still, because Bitcoin's algorithm requires more processing power, it is generally considered to be less user-friendly and more complicated than Litecoin's.
Additionally, Litecoin has a much faster transaction processing speed than Bitcoin - 2.5 minutes compared to Bitcoin's 10 minutes or so.
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And while Bitcoin's market cap recently fell below $100 billion for the first time in a year, it still sits quite a bit higher than Litecoin's at around $98 billion. Additionally, while Bitcoin actually has much less total coins (only 21 million compared to Litecoin's 84 million), the coin has been traded in such small quantities (divided into 0.00000001 Bitcoins, dubbed "satoshi" in the crypto community) that the total number is slightly less consequential. And, while the rewards of Bitcoin (which are 25 BTC per block), just like Litecoin, are halved, they're halved every 210,000 blocks.
Litecoin vs. Ethereum
Unlike Litecoin, Ethereum is actually both a cryptocurrency and a blockchain - with Ether as the actual coin (although it is generally synonymous with Ethereum for investors).
While Litecoin is a type of cryptocurrency, Ethereum is a digital blockchain platform that creates and runs decentralized applications called "dapps." For this reason, Ethereum functions in a similar fashion as the internet, but stores data in individual blockchain ledgers instead of a general storage space like Google or Facebook (FB - Get Report) .
Still, the coin - Ether - doles out only 3 coins in rewards for mining one block (compared to Litecoin's 50).
How to Invest in Litecoin
Well, the simple answer is through exchanges.Most investors buy Litecoin with either USD or BTC (Bitcoin). Because different exchanges have different trading or buying capacities, be sure to check if your exchange supports USD or BTC to LTC transactions.
It is generally the best option to go with a larger exchange like Binance (where you can trade BTC for LTC) or Coinbase (for using a credit or debit card with USD).
However, because cryptocurrency is a largely unregulated pseudo-industry, it shouldn't be thought of as the same type of investment opportunity as stocks, bonds or other securities. In fact, you should proceed with caution when investing (especially given cryptocurrency's volatility in recent months).
Cryptocurrency is popular for short-selling, and following the drop in price for Bitcoin, many are touting short-selling as the way to go with cryptocurrency.
"The new investment opportunity led to a fall in demand in the spot bitcoin market and therefore a drop in price. With falling prices, pessimists started to make money on their bets, fueling further short-selling and further downward pressure on prices," the Federal Reserve Bank of San Francisco wrote this summer.
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Additionally, others in the fintech space are bullish on the strategy with cryptocurrency.
"Shorting is one part of the creeping legitimization of bitcoin-we're getting access to proper financial products," Simon Taylor, cofounder of fintech consultancy 11:FS, told Forbes this summer.
What Is Cryptocurrency?
Cryptocurrency is a digital asset that can be used for exchange, much like traditional currencies. However, cryptocurrency uses cryptography (hence the "crypto") to secure and validate the currency online. To this degree, cryptocurrency mainly uses decentralized blockchain technology to allow miners (people who create new blocks on the blockchain) to mine various amounts of different cryptocurrency coins as they create new blocks.
However, cryptocurrency is still largely unregulated and is not widely accepted as currency (in fact, the list of vendors that accept coins like Bitcoin is actually comparatively small). Some companies that do accept cryptocurrency, however, include Expedia (EXPE - Get Report) and Dish Network (DISH - Get Report).
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