What is Litecoin (LTC)?
Litecoin (LTC) is a cryptocurrency created from a fork of the Bitcoin blockchain in 2011. It was initially designed to address developers’ concerns that Bitcoin was too centrally controlled and to make it more difficult for large mining companies to acquire the top currencies. I’ll try my hand at mining. Ultimately, it failed to prevent enterprise miners from taking over the majority of Litecoin mining, but the cryptocurrency was remade into minable coins and a peer-to-peer payment system.
Learn more about the difference between Litecoin and Litecoin.
Important points
Litecoin is a virtual currency founded by former Google engineer Charlie Lee in 2011, two years after Bitcoin, and has similar functionality to Bitcoin, but with a different algorithm. The goal of cryptocurrencies is to become a medium for everyday transactions. Litecoin has faster transaction processing time than Bitcoin. Although it is a fork of Bitcoin, there are some differences between the two.
History of Litecoin (LTC)
In 2011, Bitcoin was gaining popularity among enterprise-scale miners due to its potential price appreciation. It appeared that corporations were trying to take control of mining, as mining was rapidly becoming computationally impossible for individuals to participate in.
For some, this impending centralization went against one of the original concepts behind cryptocurrencies: to remain decentralized.
charlie lee
A project led by former Google engineer Charlie Lee, Litecoin was released to the public in 2011. Similar to Bitcoin, Litecoin is an open source global payments network designed to be decentralized. Lee called Litecoin “the silver to Bitcoin’s gold.” This statement inferred that Litecoin is not intended to serve as a replacement for Bitcoin, but rather to complement it. Like silver, it won’t be as valuable as gold, but it will still maintain its place as a payment method and will be used more.
design
Litecoin was designed to be inaccessible to the growing network of application-specific integrated circuit (ASIC) miners that have begun to dominate cryptocurrency mining. It was thought that implementing a separate hashing algorithm that required more memory than processing power would deter profit-seeking miners from trying to centralize the cryptocurrency network. However, that ASIC-resistant setup didn’t last long, and the world’s first Litecoin ASIC miner was released in 2014.
litecoin mining
You can also use your computer to participate in the Litecoin network, but unless you join a mining pool, there are no benefits other than the satisfaction of participating. Still, the pool pays miners based on a percentage of their work, so the rewards are very small. Modern computer CPUs and GPUs cannot keep up with the large mining networks that exist.
The best way to mine Litecoin in 2024 is to purchase one or more ASIC miners that are compatible with Scrypt. However, you will still need to join a mining pool because you will be competing with pools that have much higher hash efficiency.
Buying and selling litecoin
Most cryptocurrencies can be purchased on cryptocurrency exchanges. Several exchanges allow trading within the United States. There are many more exchanges outside the US. It is important to note that exchanges in the United States are monitored and regulated by the Securities and Exchange Commission to ensure that the best interests of investors and traders are protected. With that in mind, if you live in the US, your options are limited to exchanges within the US.
Exchanges are regulated and regulations are still being developed, so where you can buy and sell cryptocurrencies will fluctuate.
Exchanges outside the United States may or may not have regulators, but many countries have introduced regulations or granted regulatory authority to financial regulators. The US exchanges where you can buy Litecoin are:
CoinbaseeToroKrakenBinance.USRobinhoodGemini
Litecoin can be sold on the same exchanges where you can buy it. However, selling cryptocurrencies on centralized exchanges is different from selling on decentralized exchanges. For example, if you’re selling Litecoin on an exchange like Kraken, you’ll need to send your LTC to a Kraken address. From there, the exchange facilitates the sale of Litecoin.
To set up an account with one of these exchanges, you will need to go through a “Know Your Customer (or client)” registration process. This typically includes providing your ID, tax ID number, address, or other information that the exchange is required by law to collect. Once approved, you can deposit Litecoin and start selling.
Decentralized exchanges (DEXs) may or may not require KYC procedures, depending on the jurisdiction in which they operate.
How is Litecoin different from Bitcoin?
Litecoin is a fork of Bitcoin, but there are many differences beyond market cap and price.
litecoin
Total coin limit is 84 million
Uses Scrypt hashing algorithm
Ability to process up to 50 transactions per second
Block time is 2.5 minutes
Rewards are halved for every 840,000 blocks
Bitcoin
Total coin limit 21 million
Uses SHA-256 hashing algorithm
Capacity up to 7 transactions per second
Block time is 10 minutes
Rewards are halved for every 240,000 blocks
Halving schedule
A virtual currency halving is an event in which the block reward is halved. Litecoin was released two years later, so its halving date is different from Bitcoin. Litecoin generates new blocks faster than Bitcoin, so the reward is halved at various intervals.
LTC half-life date:
August 25, 2015: LTC 50 to 25 people May 2019: 25 to 12.5 LTC 2 2023: 12.5 to 6.25 LTC mid-2027 (forecast): 6.25 to 3.125
The future of litecoin
Litecoin has moved from a mining ecosystem dominated by individual miners to a corporatized environment where large mining pools run by high-tech companies account for the vast majority of Litecoin mining.
Whether cryptocurrencies have a future will depend on whether they sustain themselves, remain relevant, and meet the needs of users and investors. Fixes and improvements were still being maintained by the developer community as of May 2024. In 2024, Litecoin activated Runes (similar to non-fungible tokens) similar to the Runes available on the Bitcoin blockchain.
The market price was over $80, the 24-hour trading volume was about $310 million, and the market capitalization was $6 billion. From January to May 2024, the network set a record of processing 34 million transactions. This is almost four times the amount of transactions processed in the same period last year.
All of these developments suggest continued interest in the future of cryptocurrencies. However, the final outcome is anyone’s guess.
Does Litecoin have a future?
It is difficult to determine how investors, traders, crypto enthusiasts, governments, and the general public will treat Litecoin in the future. Cryptocurrencies are being scrutinized by governments. More cryptocurrencies are being created every day and the market is volatile.
What will Litecoin be worth in 5 years?
It is difficult to predict the market value of LTC in five years. It depends on its popularity and how individuals and investors use it.
Is Litecoin a worthwhile investment?
It depends on your outlook, risk tolerance, and preferences. If you like speculating and can tolerate losses if prices go down, it can be a worthwhile investment. However, if you’re looking for a safe investment that will increase in value over time, it may not be worth it. A financial advisor can help you decide whether an investment is right for your situation.
conclusion
Litecoin is a blockchain and cryptocurrency intended to be used as a payment method. Like Bitcoin, it has also started to be used as a means of investment and speculation.
You can join the Litecoin network by downloading the client and becoming a miner, or buy and sell on exchanges.
Comments, opinions and analyzes expressed on Investopedia are for online informational purposes only. Please read our warranty and disclaimer for more information. As of the date this article was written, the author does not own LTC.
