Litecoin

3 years ago
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Introduction

Litecoin (LTC) was developed by Charlie Lee and launched in October 2011. This cryptocurrency is similar to Bitcoin and, therefore, shares many of its characteristics. The block generation time of Litecoin is shorter, namely around 2.5 minutes, which enables transactions to be cleared faster. The best part is that Litecoin has lesser transaction fees than Bitcoin. It can be used as a digital currency on the internet to purchase goods and services as well as play at crypto casinos.

The value of Litecoin has grown significantly over the years, particularly in 2017. This has been due to the currency adopting several effective features such as Segregated Witness and the Lightning Network – technology that facilitates the network to process a greater number of transactions.

Description

The main difference between Litecoin and Bitcoin is that the former’s mining is monitored by the Scrypt algorithm, as against Bitcoin’s SHA 256. This feature limits ASIC miners and enables users to competently mine Litecoin on regular computers. Litecoin has been extremely popular since its creation, being among the top 5 cryptocurrencies according to market capitalization. However, it has never beaten Bitcoin.

Advantages

Strong Cryptocurrency

As Litecoin is built on Scrypt and uses the same in its proof–of work algorithm, it is strong in comparison to other ALT currencies. This makes it advantageous for the world of crypto currencies.

Takes Lesser Transaction Time

Litecoin takes smaller time intervals between adding new blocks to its Blockchain, which reduces the time of transaction. In fact, Litecoin transactions often take less than a minute and never more than one hour as against Bitcoin transactions, which could take hours.

Facilitates Anonymous Purchases

Litecoin enables users to make purchases anonymously. This makes it possible for users to keep their private information confidential. Not everyone may want to share every detail about themselves, and Litecoin gives due respect to this.

Provides High Security

All the transactions using Litecoin are secure as this cryptocurrency uses NSA-created cryptography. It is almost impossible for any person other than the wallet–owner to make any payment from the wallet. The only exception is in case of the wallet being hacked, against which there are many ways of protection.

Larger Number of Litecoin Currency is Advantageous

While the Bitcoin network can never surpass 21 million coins, Litecoin can accommodate up to 84 million coins. Litecoin’s higher number of maximum coins is an advantage over Bitcoin, given its smaller price for a single unit. Litecoin also enables transaction in whole units compared to fractions of a unit (as in Bitcoin).

Challenges

Loss of Wallet Entails Risk

Since Litecoin is not managed by any central authority, it entails risk. If the user’s coins happen to be stolen or lost, the money goes to waste, and there is nothing that can be done about it.

Operation is Not That Effective

The operation of Litecoin is as competent as desired. The client code is based on an outdated Bitcoin version and not maintained properly. This ushers technical glitches, which can create inconvenience for the user.

Volatile Value Involves Uncertainty

Since Litecoin is a cryptocurrency which is relatively new, its value is subject to high volatility. Due to the sudden and unpredictable fluctuations in value, many corporations do not want to deal with it. This is one of the main reasons why adoption of Litecoin on a mass scale is yet to take place. Great fluctuations in value involve uncertainty, which, in turn, make Litecoin unstable and unreliable. Its price is based on pure speculation alone.

Limited Acceptance

Many websites and companies are yet to accept digital currencies such as Litecoin. This makes it impractical to be used in everyday life. Given its lack of universal acceptance, before buying or investing online or offline, the user needs to ensure that it is accepted in the place where he/she wants to use it.

Lack of Adequate Knowledge

Many are not aware of how to use Litecoin in the best possible manner, and unwittingly subject themselves to hackers. The technology involving cryptocurrencies is complex, due to which one needs to be cautious before investing.

Irreversibility of Payment

If the user erroneously pays someone by Litecoin, there are no chances of getting a refund of the sum paid. One can only request for a refund at the most, but if the request is refused, there is nothing that can be done to retrieve the money.

Conclusion

At present, Bitcoin and Litecoin appear to be the gold and silver of the cryptocurrency space. However, the status quo of cryptocurrencies is not permanent, as history reflects. This emerging sector is dynamic and therefore, the position of Litecoin can change profoundly in even a few months. Only time will tell whether Litecoin will retain its popularity in the long term as well.

Source Links:

https://www.investopedia.com/articles/investing/042015/bitcoin–vs–litecoin–whats–difference.asp