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Have you heard about Litecoin? If no, then keep reading to improve your knowledge in crypto.
What is Litecoin
Are you new to the world of cryptocurrencies and would like to know more about the different crypto-currencies that exist? The most popular crypto is as you may know Bitcoin, it has been the leading crypto asset for years. However, in this article, we won’t focus on BTC but on Litecoin.
What is Litecoin?
It’s a decentralized virtual currency that was created two years after bitcoin (2011) by a former Google engineer named Charlie Lee. From the beginning, it was a serious competitor to BTC since it has almost the same characteristics as the latter, but with the creation of other crypto-currencies, its popularity has decreased. Litecoin is a purely virtual online currency, not backed by physical goods or sovereign bonds; instead, it relies on a combination of cryptographic safeguards. It is based on blockchain technology that performs transactions every 2.5 minutes, and in this blockchain, all participants (miners) are equal.
This block is verified by mining software and is visible to all members. Once a block has been successfully verified, the miner receives bonuses for it. Successful mining of crypto-currencies requires enormous processing power. However, with litecoin, miners are able to mine on their personal computers, with the understanding that the capacity of the computer will determine the value of the miner.
What is Litecoin (LTC) mining?
Litecoin (LTC) mining is the process of checking sent transactions and network performance using special computer equipment, and the process itself is based on the Scrypt algorithm. Nowadays the most effective way of mining Litecoin is using ASIC-miner. To start mining LTC the following steps should be done. First, you need to download and install Litecoin Core software from the official website, then create your own crypto wallet. Then, download and install a mining program that supports Litecoin mining. The next step is to choose the right equipment and calculate the potential profit through an online calculator. After this, you need to buy the hardware for mining. Finally, decide on a mining pool, join it and set up the equipment. Now you can start mining LTC. Profit in the process of getting Litecoin directly depends on the power of the computer, the installed video card, the experience and knowledge of the user, as well as the time spent on operations.
Similarities and differences between bitcoin and litecoin
Since litecoin is considered the lighter version of bitcoin, this means that there are similarities between these currencies. First of all, bitcoin and litecoin are decentralized currencies and, unlike other traditional currencies, they do not depend on any third party for a transaction to take place.
They rely on the cryptographic integrity of the network. Litecoin and bitcoin use Proof-of-stake ecosystems. This is a decentralized mechanism that requires members of a network to spend themselves solving an arbitrary mathematical puzzle to prevent anyone from hacking the system or performing a double transaction. With this ecosystem in place, crypto-currencies can process transactions securely without third-party intervention.
Both crypto-currencies can be purchased and mined using a mining platform. They also require the use of a cold and hot wallet in order to be stored safely between transactions. They are also volatile depending on factors ranging from investor interest to government regulations. The differences that exist between these crypto-currencies are in the cryptographic algorithms employed. Bitcoin uses the SHA-256 algorithm while litecoin uses a newer algorithm called script. Furthermore, the main objective of bitcoin was to improve the speed of transactions per trade. Bitcoin’s average transaction confirmation time is 9 minutes, while litecoin is about 2.5 minutes due to its shorter block generation time.
Despite these similarities and differences, bitcoin still has a larger market capitalization than litecoin. The estimated value of all bitcoins in circulation is about $1 trillion, while litecoin is about $18.5 billion. This just proves that no matter how hard other crypto-currencies try to be better than bitcoin, its market capitalization outperforms them all.