What Is Litecoin LTC? The Silver to Bitcoin’s Gold

Some exchanges may let you withdraw fiat currency, so if you’re looking to exchange your LTC for fiat, you’ll have to find an exchange that allows it. The Fed began the laborious task of shrinking its swollen near-$9 trillion balance sheet in the spring of 2022 following huge expansion though the Covid-19 pandemic and economically disastrous lockdowns. So-called quantitative tightening sees the Fed suck liquidity out the financial system, passing on the burden of freshly issued debt to the private sector.

• How it works is users open a payment channel between themselves and can transfer funds freely without miners.
• Litecoin is a highly liquid cryptocurrency available on most major cryptocurrency exchanges, making it ideal for traders.
• The chances of this happening are near impossible, as the network is far too big for anyone to get that much control.
• While that might not necessarily affect its value directly, it could make it more popular, which in turn creates its own potential for a value increase over time due to demand.
• Government regulations, economic conditions, government-sponsored cryptocurrency, and more can also affect cryptocurrency.
• Litecoin’s mining also keeps transaction fees relatively low due to the inherently higher total supply.
• I’m a technical writer and marketer who has been in crypto since 2017.

In theory, this sounds like a significant advantage for Litecoin; however, supply and demand generally dictate prices for commodities and investments, along with consumer and investor sentiments. Both appear to believe that Bitcoin aligns with their interests, values, and financial goals, so its price reflects that. LTC is simply another cryptocurrency that just so happens to prove its use-case as a low-cost decentralized peer-to-peer payment method. 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.

Lightning Network

Transactions are faster on Litecoin and the cryptocurrency has a larger supply. It uses a different hashing algorithm to keep mining fair for everyone, and these differences are believed to have helped LTC succeed and remain one of the top cryptocurrencies throughout the years. Following a halving event, miners receive 50% fewer rewards for every block they mine and this creates scarcity in the altcoin, reducing the circulating supply of the asset. Halving is therefore a key event that influences the asset’s price and market capitalization over time. While litecoin requires more sophisticated technology to mine than bitcoin, blocks are actually generated up to four times faster.

In a nutshell, it’s a cryptocurrency like many others, built on a similar framework and ideal as bitcoin itself. Created by an ex-Google employee a few years after the first cryptocurrency, it’s now one of the most commonly traded crypto-coins out there, with a market value in the billions. Litecoin, in order to keep up with the DeFi times, has made it possible to build Litecoin smart contracts since the fall of 2021. Using a second-layer solution called OmniLite, users can build decentralized applications and smart contracts on the Litecoin network. Litecoin had the initial aim of supplementing Bitcoin’s economy, rather than competing with it.

What are the benefits of Litecoin?

In practice, that arms race never occurred and specialized mining hardware has been developed to be used on the Litecoin network. As mentioned before, Litecoin is a mining-based altcoin, and such coins use the PoW consensus method to validate their transactions. A total of 150 LTC were premined as the genesis block — the first one on the network — and two subsequent blocks to confirm were initially mined its validity. When Litecoin launched, the reward for mining one block was 50 LTC, which was essentially worthless at the time.

• Additionally, you’d be hard pressed to find any serious claims or illusions of grandeur within the Litecoin camp.
• Those calculations get more and more complicated as time goes on, limiting the influx of new Litecoin.
• Using a second-layer solution called OmniLite, users can build decentralized applications and smart contracts on the Litecoin network.
• While some of the top cryptocurrency exchanges are, indeed, based in the United States (i.e. KuCoin or Kraken), there are other very well-known industry leaders that are located all over the world.
• After you’ve settled on your mining equipment, you’ll need to pick whether you’ll mine solo or in a pool.
• Litecoin and bitcoin use different mining algorithms, with Scrypt being the hash function used for litecoin, and SHA-256 the hash function used for bitcoin.

Although Litecoin’s PoW architecture is similar to Bitcoin’s blockchain, LTC uses a consensus algorithm called Scrypt rather than Bitcoin’s SHA-256. Scrypt is less energy-intensive than SHA-256, which helps Litecoin achieve faster transaction speeds and lower network fees. LTC can be https://www.tokenexus.com/ purchased through most cryptocurrency exchanges or via LTC-based wallets. Litecoin can also be purchased and sold through payments apps like PayPal. After purchasing, it’s important to store crypto in a secure wallet, like the paper, hardware, or desktop/mobile options, for example.

What is Litecoin?

It can also be used as a haven or as part of a diversified cryptocurrency portfolio. Atomic Swaps is another Litecoin concept that adds interoperability to the blockchain, allowing for trading multiple cryptocurrencies without actually having to exchange them. Litecoin “halving” means cutting the number of awards given by one-half after a block’s hash and transaction information is verified and an entirely new block is created. On this date, the mining reward was reduced from 12.5 Litecoins per block to 6.25 Litecoins per block. Like Bitcoin, the creation of Litecoin tokens involves a process called mining.

That’s an enormous increase that shows that just because bitcoins are worth thousands of dollars, that Litecoin can’t also be a great store of value. Some, like its creator, would argue that Litecoin has a greater potential as a cryptocurrency because of its better transactional abilities. While that might not necessarily affect its value directly, it could make it more popular, which in turn creates its own potential for a value increase over time due to demand. All examples listed in this article are for informational purposes only.

The cryptocurrency’s blockchain generates a new block every 2.5 minutes. The Litecoin supply is designed to reduce over time to preserve the coin’s value. The block is verified by mining software and made visible to any system participant (called a miner) who wants to see it.

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 What is Litecoin could only be a matter of time before more people start to add Litecoin into their portfolios. 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).