A general overview of Litecoin

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A general overview of Litecoin
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A general overview of Litecoin

Is Litecoin Real Money?

Litecoin’s intended purpose is to be used as an everyday digital currency. Faster transaction times and relatively low fees strengthen this purpose. Its predecessor, Bitcoin, is increasingly moving away from being practical for smaller purchases but is seen increasingly as an investment.

Bitcoin is relatively expensive and slow to move around, while Litecoin was designed and improved to make it cheaper, faster and better for everyday use. In addition, with more websites and businesses accepting Litecoin as a form of payment, it can be considered “real money” rather than just a means of intermediary for the world’s currencies.

Litecoin fees and costs

At the time of writing, the average transaction fee for Litecoin is just over $0.01. That’s a minimal cost compared to the percentage charge credit card companies, banks and PayPal use to transfer money.

Genesis-mining

A small transaction fee will also be charged when you buy through an online exchange platform. For example, Coinbase purchases from 0-$200 will incur a $0.99-$2.99 ​​fee, and debit card transactions will also incur a 3.99% fee. CEX.IO will charge a transaction fee of 7.5%. 

Advantages of Litecoin

Speed ​​

Litecoin transactions are fast and take about 2.5 minutes on average, which is four times faster than Bitcoin, which takes about 10 minutes. Litecoin achieves this through faster block processing times. 

Cost 

Litecoin is cheap to use for transactions, especially compared to the usual costs of Paypal, credit cards or bank transfers. Even compared to Bitcoin, whose average transaction fee is around $3 at the time of writing, Litecoin is incredibly cost-effective.

Faster Block Generation 

Every 2.5 minutes, a block is mined, and 12.5 coins are generated at the time of writing (May 2020). The next halving of Litecoin will place in August 2023. This means that there will be more Litecoin in circulation. 

If you are an aspiring “miner”, there is a greater chance that you will be rewarded for your mining than with some other currencies.

Interoperability 

Thanks to the Atomic swap technology, Litecoin can be exchanged for other currencies without having to go through an exchange, saving money. 

Decentralized – the network validates Litecoin transactions, and the transaction is stored on the blockchain. As a result, there is no central authority that controls Litecoin.

Can Litecoin be used anonymously?

The record of each transaction between parties will always be saved in the blockchain. It is, of course, possible to use an alias. In addition, the record for each transaction contains a numbered wallet address where the coins are stored, but these are extremely difficult to trace to any individual. Therefore, Litecoin provides a high level of privacy, but it is important to remember that it is not completely anonymous.  

It should also be noted that if you use one of the larger and more official exchanges on the internet, you will need to submit some form of photo ID to buy and sell cryptocurrencies. Therefore, there is no anonymity regarding your transactions when using these exchanges. However, such regulation is beneficial because it protects everyone involved.

How secure is Litecoin?

Litecoin helps ensure the security of coin holders in several ways. For example, it protects against “Flood Attacks”, where hackers try to crash the network with several small transactions. Litecoin achieves this by making it financially impractical to carry out such an attack. Litecoin charges an individual fee for each transaction, no matter how small, making such attacks potentially expensive.

SegWit technology also helps prevent “Transaction Malleability” on the user’s transactions. SegWit works by taking signature data out of the transaction ledger, preventing access by hackers. 

It should be noted that Litecoin’s network has never suffered an attack, nor have transactions been hacked. A clear result of the security measures that have been introduced. 

Which teams are working on the development of Litecoin?

The Litecoin Foundation is a development team working on Litecoin. Their objective is to “promote Litecoin for the benefit of society through the development and promotion of cutting-edge blockchain technology”.

The Litecoin Core Development Team are the main developers for Litecoin, and they work in parallel with the Litecoin Foundation, which contributes financial support. 

Atari began a partnership with Litecoin on May 19, 2020. The partnership will see Litecoin implemented as a payment method for purchasing Atari games and consoles, with more areas of collaboration to come. Litecoin is keen to enter the gaming industry, and Atari was an obvious nostalgia choice for the developers. From Atari’s point of view, the collaboration enables a new source of revenue in the form of Litecoins used to purchase new consoles or Atari tokens.

Which financial institutions use Litecoin?

In 2018, the Litecoin Foundation bought a 10% stake in WEG Bank AG. As part of the deal, WEG agreed to use Litecoin to help with transactions. In addition, the deal allowed WEG customers to obtain cryptocurrencies through a conventional bank, allowing them to use these new currencies as means of payment.

WEG was naturally keen to take advantage of the fast transaction times that Litecoin could offer. Likewise, Litecoin was keen to leverage the legitimacy of partnering with an established bank like WEG. Such collaboration was a major step in bridging the crypto and traditional finance gap.

Litecoin Mining

Litecoin uses a Script mining algorithm to make the process more democratic. Bitcoin’s mining system, which Litecoin improved upon, was meant to be democratic and give everyone access to the currency. However, it was not quite that straightforward. Therefore, Lee ensured that Litecoin would be more accessible to everyone.

The Scrypt algorithm requires the calculations for mining to be performed sequentially rather than in parallel as with Bitcoin. This effectively prevents ASICs (Application-Specific Integrated Circuits) from having a monopoly over the mining process. 

The ban on using ASICs allowed greater participation for Litecoin mining among those who still rely on GPUs (Graphics Processing Unit) for mining. However, it should be noted that it would be very slow and use significant energy.

The faster validation times for new blocks that LTC (Litecoin) achieves further democratizes the mining process by allowing more potential miners a chance to be rewarded for mining a block.

Litecoin Wallets

A Litecoin wallet is a piece of software that stores Litecoins. There are many types:

  • Ledger Nano S – Hardware wallet
  • Trezor – Hardware wallet      
  • Exodus – Digital wallet      
  • Atomic wallet – Mobile and digital wallet
  • Jaxx – Mobile and digital wallet
  • Loafwallet – Mobile wallet      

Different types of wallets offer different types of security, portability and accessibility.

Is Litecoin a good investment?

Litecoin has a maximum supply cap of 84 million coins; at the time of writing, nearly 64 million have already been put into circulation. Having a limited supply of coins ensures Litecoin from the devaluations normally caused by inflation. 

As such, it can be used in the future as a safe deposit box by investors during turbulent economic times and an option to make multiple payments daily. 

If investors realize that cryptocurrencies are the future of money, Litecoin would fit well with its ethos and structure. It is specially tailored for fast and cheap digital transfers and can become one of the main cryptocurrencies used worldwide.

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