How good is Litecoin ?

It would be impossible to venture into the crypto space for long without eventually running across one of the oldest and most reputable coins in existence – Litecoin (LTC). Litecoin is an open-ѕоurсe рееr-tо-рееr digital cash system similar to Bitcoin. Importantly, Litecoin was developed to improve on some of the shortcomings of the world’s first successful cryptocurrency, Bitcoin. To this extent, Litecoin has also been labeled the ‘silver’ to Bitcoin’s gold by many in the sector.

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What is Litecoin?

Litecoin was one of the earliest cryptocurrencies to enter the market. Consequently, it remains one of the largest coins in the sector based on market capitalization. This hugely popular coin can be found on nearly every crypto exchange. Also, it’s one of the most widely accepted cryptocurrencies in the world. You can use Litecoin for purchasing goods, services, or even investing in other crypto projects as they emerge.

Like most cryptocurrencies, Litecoin utilizes blockchain technology to remain decentralized. Decentralized currencies differ from traditional fiat currencies in many ways. Primarily, they are not issued from a central authority such as a government. Instead, Litecoins are produced via a сrурtоgrарhіс рrоtосоl. Officially, Litecoin’s are released under MIT/X11 lісеnѕеѕ.

How Does Litecoin Work?

Litecoin functions in a manner very similar to Bitcoin. In fact, this online payment system was directly inspired by Satoshi Nakamoto and his release of the Bitcoin protocol. Many people are surprised to learn that Litecoin was one of the earliest Bitcoin forks in the market. As such, this cryptocurrency is technically almost іdеntісаl tо Bіtсоіn, albeit with some crucial differences.

LTC’s developer, Charlie Lee began his Litecoin project by borrowing the core code from Bitcoin. He then made several important modifications to the protocol. One of the main upgrades he introduced was the reduction of the block approval time from 10 minutes down to 2.5 minutes. Just like with Bitcoin, these blocks contain the next batch of transactions awaiting approval.

Block Time Reduction

The block time reduction gave Litecoin more scalability than its predecessors. Notably, LTC is now 4x faster than Bitcoin in terms of transactions per second (tps). Lee also adjusted the transaction fee model within LTC to make it more appealing to the masses. Specifically, Litecoin’s fee structure is 1/50th the size of Bitcoin.

This fee structure is one of the main draws to the platform. Amazingly, it only costs 1/1000 of an LTC to process a transaction. This minuscule fee doesn’t change depending on the size of your transaction either. You pay the same amount regardless of its size. This strategy provides a huge upgrade to the current market leaders. For example, PayPal charges a 3% fee for every transaction conducted within their network.

LTC Total Supply

One of the main draws to Litecoin, and cryptocurrencies, in general, is their finite supply. Unlike fiat currency, which governments can print at will, Litecoins are only produced at set intervals following the approval of a block of transactions to the network. In total, there will only ever be 84 million Litecoins produced. Interestingly, this amount was the result of simple calculations on the part of the developers.

Basically, developers decided that since Litecoin processes transactions at 4x the speed of Bitcoin, it would be wise to provide the network with 4x the tokens. Critically, this fixed amount of coins also means that inflation will not affect the overall value of the currency as time progresses. The more time that goes by, the more value that each Litecoin should hold. As of today, there are already over 65,177,458 Litecoins in the market.

Many traders view Litecoin as a more sustainable option within the market. Their views are not without reason. For one, LTC often experiences less volatility than its big brother Bitcoin. Also, the development team behind this project is a bit more advantageous than Bitcoin’s development team. Specifically, LTC developers have proven their desire to remain technological ahead of the competition time and time again. The platform was the first to add the Segregated Witness update.

Additionally, Litecoin began processing Lightning Network transactions months before BTC. In May of 2017, LTC adopted the Segregated Witness protocol months before Bitcoin was able to do so. That same year, the development team behind the project also conducted its first Lightning Network transaction from Zürich, Germany to San Francisco.