Blockchain, in simple terms means a database technology, or a distributed ledger that maintains an ever growing list of data records which are decentralised and impossible to tamper with. The data records, which may be a bitcoin transaction, smart contracts or in terms of other cryptocurrencies are combined in the form of blocks.
Hence, when a new transaction is entered, a block is added to the existing chain of records. Such an addition needs to be validated by 51% of all the nodes in the network making peer-to-peer transactions possible without the requirement of a centralised certifying authority.
There is a lot more to Blockchain than it being just a combination of decentralized transactions, and the scope is constantly increasing with the development of multiple cryptocurrencies. These range from different blockchains (Bitcoin blockchains, hyperledgers etc.) to marketplaces and cryptocurrencies: Bitcoin, Ethereum, Litecoin and multiple others.
What is Litecoin?
Litecoin is a peer-to-peer cryptocurrency and an open source, global payment network made using scrypt proof of work, and was launched on 13 October, 2011. The cryptocurrency has a market capital of more than $2 Billion as of 2017, which is 5x greater than the next largest currency, Peercoin.
The currency enables instant, almost no-cost payments to anyone in the world and has a fully decentralized system without any central authority. The digital currency is created and transferred electronically using encryption. All the transactions under Litecoin are recorded on a public ledger- blockchain, which allows payments to be verified in real-time.
Like Bitcoin, public ledger records all transactions, any new coins are created through a process known as “mining.” The major difference between Bitcoin and Litecoin is that Litecoin is built for speed. It allows quick transactions, making it a great choice for payment.
As of 2015, Litecoin was the second most popular cryptocurrency and third largest when it comes to market capitalization. One Litecoin was worth around $1.5 USD in 2015 whereas in late 2017 it hovered around $60-$95 USD. These coins function as an online payment system where users can transfer currency to one another without the need of an intermediary like bank.
Who Created Litecoin?
Litecoin, which is a sister cryptocurrency to bitcoin; also projected as a better substitute to Bitcoin was created by Charlie Lee. Born in the West African nation of Ivory Coast, Lee completed his masters from MIT. He then worked for notable tech companies like Guidewire Software and Google.
Lee later went on to create the cryptocurrency while he was still working at Google, as an excuse to learn the Bitcoin code. At that time, creating the next Bitcoin was all the rage and he was no exception, although his first attempt- Fairbix wasn’t a success.
Less than a month after the failed release of Fairbix, Charlie Lee released Litecoin. This time around, Charlie cloned the core Bitcoin source code and made a number of adjustments which he felt were improvements on the problems faced with Bitcoin.
Why Choose Litecoins?
According to Charlie Lee, transactions under litecoins enjoy faster confirmation time. Where one bitcoin transaction takes about 10 minutes to process, a transaction under litecoin cryptocurrency takes just two-and-a-half minutes.
This is because a bitcoin transaction process requires confirmation from other users who have previously located the transfer on the master ledger which takes about 10 minutes. Although the odds of a transaction not being confirmed is pretty low, Litecoin eliminates this requirement entirely.
Mining In Litecoin
Unlike regular currencies which are regulated by Federal Reserve and specially printed, litecoins are created by an elaborate process called mining– the process of listing litecoin transactions.
The supply of litecoin is fixed, which means that ultimately, there will be only 84 million litecoins in circulation. As opposed to bitcoin, Litecoin generates a network called a block after every 2.5 minutes, which is a ledger entry of all recent Litecoin transactions around the world.
Bitcoin is built around hash cryptography which gets more complex as more transactions are added, and thus require more expensive computing power to mine. Litecoin eliminates this requirement by using an entirely different cryptography program, called Scrypt, where the limiting factor is memory, not processing efficiency.
The block made of transactions is verified by a mining software and made visible to any “miner” who wants to see it. Once miner verifies it, the next block enters the chain, which is a record of every Litecoin transaction, ever.
The incentive for mining is that the first person to perform mining successfully and verify the block is rewarded with 50 litecoins. These litecoins awarded, reduce with time, where it would continue at regular intervals until the 84,000,000th litecoin is mined.
Additionally, one unscrupulous miner cannot change the block, because the scam would be detected immediately by other miners which makes it impossible to spend the same litecoins twice.
Trading In Litecoin
Litecoins can be easily integrated into existing applications and can be used to receive services like web development or buy goods. The cryptocurrency is fully compatible with Bitcoin API’s. The fast transaction confirmation feature makes litecoins ideal for small-sized purchases.
The cryptocurrency can be very easily purchased and sold on various exchanges using multiple currencies.
The Litecoin website has a growing list of services, merchants and providers that accept Litecoin, ranging from financial services to beauty product merchants.
You can buy Litecoins in the following ways:
- Purchase directly from an exchange: Litecoins are identified on exchanges under symbols LTC or XLT.
- Earn litecoins via mining: As already explained, the first person to successfully mine the block receives some litecoins as a reward. It is necessary to know that this process is slow and requires specialised equipment.
- Payments using Litecoins: Litecoins can be used to make payments for goods and services as it comes with little or no transaction costs.