Here’s another article from our Before You Invest series! In this series, we’ll provide you with all of the information you need to know before investing in certain cryptocurrencies.
Litecoin was made to function as a faster, cheaper version of Bitcoin. Released two years after Satoshi Nakamoto’s Bitcoin protocol went online, Litecoin has maintained an active community and remains a popular choice for cryptocurrency investors.
LTC, Litecoin’s token, has been described as “silver to Bitcoin’s gold” by its creator.
Litecoin’s network serves not only as a payment system, but also as an important testing ground. Developers who build new functionalities for Bitcoin often run trials on Litecoin’s network, as the two blockchains share many similarities.
Any investor can acquire LTC tokens on the open market, including on BTSE’s exchange. This article will explain what LTC is, its origins, why it’s important, and how it may fit into the portfolios of crypto investors.
What is Litecoin (LTC)?
As one of the earliest altcoins, Litecoin was created from a Bitcoin fork in 2011. Litecoin was designed in response to two concerns: Bitcoin was becoming too centralized, and large mining operations were disincentivizing individuals from participating in cryptocurrency mining.
The team behind Litecoin did not manage to mitigate the growth of major mining companies — many that operate today mine LTC, although to a lesser extent than Bitcoin. Instead, Litecoin has been reshaped as a peer-to-peer payment network using its LTC token.
What can Litecoin Do?
Litecoin is similar to Bitcoin, but was designed based on a slightly different algorithm. Litecoin differs from Bitcoin in four ways:
- It uses the scrypt hash function for its proof-of-work (PoW) mechanism, while Bitcoin uses SHA-256.
- It generates blocks four times faster, with an average interval of 2.5 minutes.
- Its mining difficulty changes every 2.5 days, as opposed to Bitcoin’s 2 weeks.
- In May 2022, Litecoin completed its Mimblewinble Extension Blocks (MWEB) upgrade, giving users optional privacy features.
Since Bitcoin and Litecoin are interoperable, it is possible to use Litecoin’s network as an intermediary to join Bitcoin’s Lightning Network payment protocol.
Who created Litecoin?
Charlie Lee created Litecoin and released it in October 2011. Lee was a software engineer for Google, and wrote code for ChromeOS. After becoming interested in Bitcoin, he took inspiration from the protocol and made Litecoin.
Between July 2013 and June 2017, Lee worked for Coinbase, spending his latter two years at the exchange as Director of Engineering.
In December 2017, Lee sold or donated all his LTC holdings, except for several physical tokens that he retains as keepsakes, citing what he considered to be a conflict of interest. He is now Director of the Litecoin Foundation, which promotes the adoption and development of Litecoin.
How to mine Litecoin?
Litecoin is a PoW protocol, so mining LTC tokens begins with configuring the right hardware. Specifically, would-be miners need to use ASIC (application-specific integrated circuits) mining machines rather than CPU or GPU cards. ASIC machines are tailor-made to mine PoW cryptocurrencies.
Configuring an ASIC rig for mining LTC tokens involves installing software that distributes work to miners, then adds new blocks to the Litecoin blockchain. If you are interested in mining LTC on your own, we urge you to examine what type of software suits your needs and limitations. There is a user-friendly software that is easy to deploy, as well as more advanced suites that offer a high degree of customization but require some coding skills.
The next step for most miners is to join a mining pool. This is necessary for most individuals as large operations mine LTC tokens at an industrial scale, utilizing mining farms that are at times the size of football fields to gain an edge. Mining pools allow individuals to combine their mining power and split the rewards for contributing to the network. Part of those rewards will be paid as fees to the pool’s operator.
The cost of undertaking this process can be high. Some ASIC miners can be set up with an investment of several hundred US dollars, although a professional setup can cost five figures. Additionally, the cost of electricity needs to be taken into account — a rig that runs 24 hours a day and 7 days a week can lead to a hefty power bill.
What is Litecoin Explorer?
A Litecoin explorer allows users to search for transaction details on the Litecoin blockchain. To utilize a Litecoin explorer, you will need to input information for a search: an address, a transaction number, or a block number.
Where and how can I buy Litecoin?
The LTC token is listed on the world’s top cryptocurrency exchanges, including BTSE.
Swapping for LTC on BTSE’s exchange is an easy 5-step process:
- Log in to your personal account on BTSE. If you do not have a BTSE account, you can register here.
- In the “Spot” section, choose “LTC” as one element of your trading pair.
- Choose the other element in the trading pair — you can define the stablecoin, fiat currency, or cryptocurrency that best fits your trading strategy.
- Select the type of order you want to place — limit or market — then enter the amount of LTC you want to buy.
- Click “Buy Order.”
And then you’re done! Your new LTC token balance will be displayed in your wallet.
Closing thoughts
LTC is one of the most popular cryptocurrencies. It consistently ranks among the top 15 tokens by market capitalization, and its legacy of being one of the first altcoins along with its payment utility make LTC a popular choice for investors who believe in the potential for cryptocurrencies to be applied in the field of remittance.
Disclaimer
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