What is Litecoin?
Litecoin is a peer-to-peer cryptocurrency that created by a google employee named Charlie Lee in 2011. Litecoin and Bitcoin have similarities and always compare together. Basically, it is base on Bitcoin’s original source code and was an early altcoin.
Litecoin is a form of digital money that utilizing blockchain technology to transfer funds directly between individuals or businesses. Same as other cryptocurrencies, it is decentralized and is not issued or control by any government. In fact, it designed to make transactions faster and cheaper in order to make it suitable for daily purchases.
As we mentioned before, Litecoin and Bitcoin has similarities. Like Bitcoin, Litecoins created by procedure called mining. Miners process the data by using their computers and new coins generated. The total number of Litcoins are limited to 84 million coins and every 2.5 minutes a new block is generated and add to the blockchain.
the first miner who could successfully verify a block would get the reward. Same as Bitcoin this reward will reduce with time and gets halve. The halving happens regularly until the total amount of 84 million coins has mined.
Unlike Bitcoin that its mining requires specific hardware, Litecoin mining is possible with ordinary personal desktop computers or even laptops. Although the greater machine’s capacity for mining, the better chance to solve a block and get the reward.
Litecoin Vs. Bitcoin
Although they have similarities, they are different in some aspects. Below are the main differences between Litecoin and bitcoin:
In Litecoin network, the blocks generated four times faster than Bitcoin. It processes the higher number of transactions over the same time period.
Total amount of coins
The total amount of Litecoin is four times more than Bitcoin. It’s 84 million coins compare to 21 million coins for Bitcoin.
Although It is the most traded cryptocurrency, it has a smaller market cap than bitcoin.
Litecoin and Bitcoin use different mining algorithms. Litecoin uses Scrypt while bitcoin uses SHA-256. It developers chose Scrypt algorithm to avoid mining being dominated by ASIC-based miners. This allows miners to compete even if they use CPU or GPU-based miners.
What factors affect litecoin’s price?
Litecoin’s volatility is likely to be driven by similar factors to bitcoin, for example:
- Regulation: cryptocurrencies are currently unregulated by governments and central banks. There are questions about how this could change in this next few years, and what impact this could have on value.
- Supply: there is a finite number of litecoins available (84 million). Availability can also fluctuate depending on the rate at which the coins enter the market.
- Press: prices of litecoin can get affect by public perception, security, longevity and the prices of other cryptocurrencies such as bitcoin.
- Adoption: It hasn’t currently adopted by businesses or consumers as a method of payment. But, some see potential in the blockchain technology and think this could become more widely adopted in the future.