Quick Facts

Approximate Market Cap$8,836,831,230
Year Established2011
FounderCharlie Lee
Symbol/AbbreviationLTC
UtilityStore of Value Token

Bitcoin’s issues caused by a transaction delay led to longer process times for completing transactions. The development of Litecoin came as a response to Bitcoin’s scalability issue. The upgrades to Litecoin’s blockchain led to faster transactions and lower fees.

What is Litecoin – Definition

Litecoin (LTC) is a peer-to-peer (P2P) virtual currency and payment network. Powered by a blockchain protocol it runs on open-source software. Its users may transfer funds to anyone in the world at reasonably fast and inexpensive rates.

The Litecoin source code is available on the Internet for anyone to read or contribute. This contributes to a huge base of Litecoin advocates.

Another feature of Litecoin is its pseudo-anonymity. Public wallet addresses are not directly connected to any personally-identifying information.

Pros and Cons

Pros

  • Faster transaction speeds
  • Lower transaction costs
  • Less processing power for mining needed

Cons

  • Low rate of adoption
  • Volatility
  • Difficult to scale

The History

In 2011, Charlie Lee launched Litecoin. His plan was to advance Litecoin by encouraging sophisticated blockchain technology solutions. The launch of Litecoin was as an “altcoin”. 

Litecoin is Bitcoin’s alternative based on modifications to the code base. It is so related to Bitcoin that it does not actually have its own whitepaper. 

Litecoin’s price fluctuated dramatically in the beginning. The new version in 2013 offered lower transaction costs while also improving security and performance.

After a long time of slow activity till 2017, the price of Litecoin is now constantly climbing.

How Litecoin Works

Every Litecoin is referred to as a token. The token is completely digital. Mining Litecoin is the process of creating new Litecoin coins. 

Litecoin is usually used as an asset or to pay for products and services at businesses that accept it.  The easiest way to buy a Litecoin is by using a crypto exchange or a physical Litecoin ATM.  

Litecoin provides quicker block creation and a larger total number of coins. Its features include a changed hashing algorithm and a redesigned user interface.  

Litecoin uses proof-of-work (PoW) consensus algorithms to validate transactions. Its protocol eliminates the need for authority making it decentralized and permissionless. Because of the relatively quick transaction process rate, hackers find it difficult to attack its network. 

Advantages & Disadvantages

Advantages

Faster transaction speeds 

Litecoin blockchain generates blocks at a rate of 2.5 minutes as opposed to 10 minutes for Bitcoin.

Lower transaction fees 

Transaction fees for Litecoin payments are far less than those for making or accepting credit card payments.

Lower barriers to entry for miners 

Litecoin mining is very attractive to potential miners. This is because it requires less processing power and has lower operating costs. 

Disadvantages

Adoption

Litecoin has a relatively low rate of adoption and usage when compared to Bitcoin.

Scalability

Litecoin’s scaling up in the future will be difficult. Faster cryptocurrencies, including Raiblocks, are already available.

Litecoin in the Global Crypto Market

Litecoin is one of the most successful derivatives of Bitcoin. It complements and reinforces Bitcoin in purpose, function, and utility.  

Litecoin’s maximum supply cap is set at 84 million LTC. Not all Litecoins have been released. The value of a Litecoin is always controlled by market forces. Its system also includes a deflationary mechanism.  

Litecoin’s price may easily change for a variety of reasons. These may include economic conditions, political developments, or basic supply and demand changes.

FAQ

Can Litecoin lose its value?

It is possible that any digital asset will never be broadly adopted. In that case, it may lose most, if not all, of its value.

Does Litecoin have a supply limit?

Yes, the max supply of Litecoin is 84,000,000 LTC. That’s also four times the circulation limit of bitcoin, which is set at 21,000,000 BTC.

Is Litecoin mostly used by individuals or businesses?

Individuals and businesses use Litecoin to make purchases and send payments across accounts.