Making payments with intangible currencies used to sound like a scam. However, with the increasing acceptance of cryptocurrencies (digital money) Litecoin has become more prominent.
What is Litecoin?
Litecoin (LTC) is a digital currency (altcoin), released on October 7, 2011, that allows payments to individuals without the use of third parties like banks. It is an open source system without a central authority developed by Charlie Lee, a former Google employee, and released to the public on October 7, 2011.
Litecoin is incredibly similar to Bitcoin - no white paper for Litecoin was even produced in part because of its similarity to Bitcoin. Similar to Bitcoin, Litecoin is open-source and it is not government regulated. However, it is secure because each user has the ability to verify each transaction before a new block (a string of blocks is a blockchain) is formed, similar to how Bitcoin works.
Litecoin vs. Bitcoin
There are few key differences between Litecoin and Bitcoin that you should be aware of. These differences include:
4 times the number of coins: There will be 84 million LTC vs 21 million BTC
1/4 block confirmation time: 2.5 min for LTC vs 10 min for BTC, making the use of LTC faster for transactions (very desirable for something attempting to be the main transactional cryptocurrency)
Proof of Work (PoW) uses scrypt: Scrypt is a password-based key derivation function (KDF) that makes it (1) less practical to use ASIC devices for LTC mining and (2) to carry out attacks against the Litecoin network
The above changes stemmed in part from the fear that the Bitcoin network is too cumbersome and dominated by large-scale bitcoin miners using purpose-built ASICs to mine BTC. Litecoin's aim is to be "lite" in the sense that mining is easier for everyone, transactions are faster, and more LTC exists in circulation. In this, Litecoin is attempting to be the more transaction cryptocurrency and is considered by some to be the "silver to Bitcoin's gold."
Success of the Litecoin
Though not the first cryptocurrency, it has been very successful. In November 2013, Litecoin’s aggregate value experienced a 100% increase within 24 hours. As Bitcoin rises in value, reputable altcoins such as Litecoin have been able to ride Bitcoin's coattails to new highs.
Presently, Litecoin is among the top five cryptocurrencies in the world. It is praised for its speed as it takes about two minutes for transactions using the Litecoin network to go through.
How to Acquire Litecoin
You can get them by either mining them (similar to mining Bitcoin) or simply buying them. To buy, you can either use fiat currency or another cryptocurrency or cryptoasset (usually Bitcoin).
To mine means to contribute computer power to validating transactions on the Litecoin network and being rewarded for the exertion of this effort. The miner is required to solve complex mathematical problem/puzzle as part of the mining process. As with Bitcoin, the incentives paid out for mining decrease over time in order to maintain a stable supply of LTC.
Future of Litecoin
Litecoin is a rapidly growing cryptocurrency which has been described as the more transaction-friendly cryptocurrency. In this, Litecoin is able to differentiate itself from Bitcoin and argue that the value-add is in the transactional capabilities. Some in the cryptocurrency and cryptoasset industry believe that Bitcoin will over time be used for large-scale clearing transactions (more rare and large) while Litecoin will be used for daily transactions (far more numerous and relatively small). Time will tell if this dynamic plays out or if the Bitcoin network is able to improve over time to become more flexible and more accommodating to large numbers of small-scale transactions without requiring extremely large computing resources deployed around the globe.
And now, given the rise of cyrptocurrencies and crypto assets to quasi-mainstream financial assets, we're dedicated to providing quality, relevant, and interesting material on cryptocurrencies and cryptoassets. Articles on Bitcoin, Ethereum, Ripple, Cardano, and many more cryptocurrencies and cryptoassets can be found on Pennies and Pounds - all that in addition to a plethora of information on what cryptoassets are, how the entire crypto industry came to be, blockchain/immutable ledger technology, mining, proof of work, proof of stake, and how to prudently invest in crypto if you are so inclined (based on your risk tolerance and ability to withstand the volatility that will come with a crypto portfolio).