Litecoin really is a frontrunner when it comes to the big old cryptocurrency rate. It does have some technological limitations, for sure, but a lot of investors have shifted their focus to Litecoin instead for the benefits that it has to offer. In fact, people who once invested in Bitcoin are now choosing to invest in other cryptocurrencies instead. Sure, there are other and faster cheaper versions of Bitcoin but Litecoin is able to rival Bitcoin for a few reasons. One reason is because it is a store of value and it also helps to maintain utility for day to day transactions. Litecoin has also reached a top 5 status and it also has a very loyal community as well. It’s important to know that Litecoin emerged as being a “lite” alternative to Bitcoin. The transaction longevity is fast approaching and after 10 long years it is finally getting somewhere. Litecoin really is now, and always will be the “lite” version of Bitcoin. Before Litecoin started out in 2010, Bitcoin existed with very slow and very expensive transactions. The value of a network that is completely decentralised and it is a peer to peer currency as well. It was a prospect to a technical revolution and a lot of people knew that Bitcoin would not be able to compete and that in the long-run, it would not be a viable option.
Bitcoin has a block creation time of well over 10 minutes. It also has a mining model to match. A lot of advocates for cryptocurrency have been looking for an alternative for quite some time now and a lot of altcoins have been created as a result. A lot of altcoins have different models and they also have a lot of negligible improvements as well. Charlie Lee has come out and stated that they are involved in a ton of pioneering attempts. They have gone on to create Fairbrix for example, and this is a fork of Tenebrix. This has the ability to half the creation time for a block, making it a total of 5 minutes instead of the usual 10. Lee has set out to create an altcoin that is able to uproot Bitcoin. To try and tackle this, Litecoin was able to come back in 2011 from a fork for the original protocol. They went on to forge an ICO and with this came a subtle and crucial modification. They were then able to slash the creation time to half of this amount, making the total 5 minutes into 2.5 minutes. This meant that they could supply 84 million to Bitcoin’s own 21 million.
Litecoin at the moment has been introduced as being the silver to Bitcoin’s own gold. Litecoin never actually intended to annex Bitcoin however. LTC has flourished over all of its competitors and it has come a long way since it started out. In Lee’s own eyes, Bitcoin has functioned as gold ever since it started out. At the end of the day, it is ideal for substantial transactions and it is great when you look at the long-term success that it has achieved over the last few years. Litecoin on the other hand has been used for smaller and much more cheaper everyday transactions. Charlie Lee, who is the founder for Litecoin has a vision and that is that Litecoin could be used on a daily basis to buy a huge range of things. It could even go on to be a payment method of choice for a lot of people. His vision has been in the works for a number of years now, over a decade in fact. The vision nearly came to fruition in February this year when Litepay was announced. This gave users the chance to spend Litecoin as they normally would as if they were using a debit card or even a credit card. It was scheduled to launch in February and Litecoin really was ready to enter the market at the time.
That being said, a lot of investors are aware that the execution does carry some weight. Litepay closed up their shop on the launch day and they stated that card issuers had taken some hostile actions against them and this brought about a lot of quarrels along the way. The funding was one issue, and this was more than enough to send the whole project off the rails. As with everyone else, people got way too excited at the time and they thought it would be the next big thing. Unfortunately there were warning signs and a lot of people overlooked them.
In spite of this setback, Litecoin really is one of the most used cryptocurrencies out there and this is for a huge number of reasons. It is even the foundation for blockchain based video games as well.
So how does Litecoin work? It is only a few lines of code different to Bitcoin. It uses a PoW based mining. Encryption is also secure and it is a peer to peer decentralised network as well. When you look at Bitcoin, you will soon see that it is in limited supply. You will also find that this makes their 84 million units the opposite of inflationary. This is all in-line with Lee’s own vision to have the coin as a digital silver. LTC coins really are fractionally exchangeable as well and this is a feature that often accompanies high-end assets. When you look at the mining front, you will soon see that Litecoin is very profitable and that it is able to reward miners with 25 LTC for every block. This is $3500 when you look at the current price of the coin. Rewards really have halved when you get to the 840,000 block, and this is going to happen every four years or so. The process is very similar to Bitcoin and you will find that the script algorithm is very similar as well. Tenebrix is also a very useful asset.
Tenebrix and Lee claimed that mining the currency Litecoin could actually be done on a CPU or a PC but miners started using GPUs and this brought about an army of ASIC miners as a result. There really is no technical explanation that Litecoin can make to try and not mention Bitcoin. After all, Litecoin has based everything on the mechanics of Bitcoin and they both have the POF consensus. This is a bullseye that is installed on every single 2016th block. It stood at a hard fork and block confirmation rewards started at 50 units. The two are almost identical in terms of the architecture of it. Litecoin has a 2.5 minute processing time gives people the chance to have a faster transaction time. This also permits copious transactions to be made, all at the same time. The problem is that one of the disadvantages to come with this is that the blockchain for Litecoin has to be bigger than the one for Bitcoin. Now imagine the two protocols have a similar hashtag power. Litecoin’s own creation time helps to reduce the risk of double spending attacks. This is a major issue that is plaguing Bitcoin at the moment.
The Scrypt for Litecoin doesn’t have parallel processing power either. This increases the complexity of the network and it also makes things much more difficult. That being said, Litecoin is progressing in leaps and bounds, and some might even say that it is surpassing Bitcoin in every respect.