Introduction
Litecoin, a cryptocurrency, was created in 2011 by a Google engineer, Charlie Lee and was a pioneer of the “altcoins”, which is an alternative to Bitcoin. It runs on the original source of Bitcoin and shares some characteristics with Bitcoin. Litecoin was specially devised to improve the transaction speed as compared to Bitcoin.
Litecoin has seen major fluctuations in its price due to experts’ opinions about LTC price prediction but has gained popularity as a cryptocurrency.
Litecoin Basics: What Is Litecoin?
Litecoin is a decentralized form of finance, the government having no control over it. It was made from a fork in the transparent public ledger, the blockchain network. Litecoin was created with the purpose to conduct transactions with cryptocurrency between people and institutions within an instant with zero transaction fees. Litecoin uses the PoW system for verifying transactions. Litecoin allows swift transactions due to a mining algorithm known as scrypt. After every 2.5 minutes, Litecoin prepares a new block for mining which is faster than Bitcoin’s mining speed by 4 times. Litecoin has a supply of 84 million in the market of which 67 million had been mined till October 2021.
How Does Litecoin Work?
Litecoin is mined in the same process as Bitcoin and other major blockchain cryptocurrencies. The miners using high-powered computers confirm each block of transaction, securing it to the blockchain. This process needs a lot of calculations and therefore the name “proof of work” or PoW. When one block is verified, another block joins the chain. Users can make transactions with blockchain technology anonymously. Miners successfully verifying the blocks receive 12.5 Litecoins as rewards. The Litecoin award to users are halved at a regular interval.
Litecoin was first introduced in 2011 and then the reward for verifying blocks was 50 LTC. The first time that it was halved was in August 2015, coming down to 25 LTC and in August 2019, the reward was further halved to 12.5 LTC. Halving will continue till the 84000000th LTC is mined. Halving usually occurs after every 4 years according to the Litecoin algorithm.
How Is Litecoin Different From Bitcoin?
Litecoin is different from Bitcoin in mainly four ways which includes the litecoin supply which is 84 million as compared to Bitcoin which has a supply of 21 million in the market. Litecoin and Bitcoin miners need to solve hash functions for mining using cryptographic algorithms. Bitcoin employs the SHA-256 algorithm whereas Litecoin uses an algorithm named scrypt. Scrypt does not allow Litecoin mining to be dominated by ASIC miners, allowing GPU and CPU miners to participate in the competition. Bitcoin takes 10 minutes on an average to confirm one transaction whereas Litecoin takes only 2.5 minutes for doing so. Litecoin can generate a block in a shorter span of time as compared to Bitcoin. The faster transaction speed can be attributed to this. Bitcoin has a greater market capitalization than Litecoin. The value of Bitcoins circulation was worth $1.1 trillion on October 25, 2021 and that of Litecoin was $13.42 billion.
What Is the Price of Litecoin?
CoinMarketCap and other websites show the accurate price of Litecoin. The price of Litecoin has seen fluctuations in the past and will no doubt see in the future. In December 2017, Litecoin was priced at the highest, its value being $375. In December 2018, the price went down to $24 before rising again in 2019. As on October 25, 2021 the value of Litecoin was $195.
What Factors Affect LTC Price?
The price of Litecoin is dependent upon demand as the price of any investment is. Litecoin being the first altcoin was a major competition to Bitcoin owing to its faster transaction speed and low fees for transactions. Over the last 10 years, there has been development in the field of technology and numerous cryptocurrencies emerged with fast transaction speed and other significant features. The competition has lowered the need for Litecoin and that in turn has had a major impact on its price. The low price of Litecoin means that it is not very attractive to miners. As on 25th October, 2021, when measured in terms of market cap, Litecoin was the 17th largest cryptocurrency.
Conclusion
Litecoin, the first alternative to Bitcoin, was adopted quickly by the public. The utilization of the scrypt algorithm led to a faster transaction speed of 2.5 minutes. After ten years it has faced competition from other cryptocurrencies having fast transaction speed and it still remains in the top 20 list of cryptocurrencies even today.
