Litecoin is just like Bitcoin. It is a cryptocurrency that runs across a decentralized peer to peer network
Litecoin Payments Security
It allows users to make payments securely and anonymously without involving any third parties like banks. Litecoin was brought to the light in 2011 when it was launched by the former Google employee Charlie Lee.
Litecoin is currently priced around 47$ with a market cap of $3 Billion, taking the number 8th spot in the crypto market. It has a maximum supply of 84 million and the current circulating supply is around 65 million.
Working of Litecoin
Like Bitcoin, Litecoin transactions are recorded in a transparent public ledger called Blockchain. Where each block contains a list of all the previously verified transactions. Anonymity in Litecoin is maintained by using the wallet address instead of names like we use in our traditional Banking system.
All the transactions take place between the wallet addresses. Each computer in the network keeps its own copy of the blockchain. So, anything in the blockchain cannot be changed without the agreement of the majority of the computers connected to the network. Pending Transactions are maintained in a pool and are not finalized until they enter a blockchain.
First, the computers must check all the transactions against historical transactions and after this process is done, all the legit transactions are added to a new block. This block is then verified through a process known as mining. In the process of mining, computers compete to solve complex mathematical problems. The winning computer provides proof that the block is valid. This process is known as proof of work.
Other computers use this proof to verify the block and update their own ledgers. The winning computer is rewarded with freshly mined Litecoins.
Litecoin transactions are verified and confirmed faster than Bitcoin because it generates a block in the Blockchain every 2.5 minutes compared to Bitcoin which usually takes around 10 minutes. So, Litecoin offers low transaction fees and faster transactions than you will get on Bitcoin.
- It is faster and cheaper because it uses an algorithm called Scrypt, which is Litecoin’s unique mining algorithm.
- It is a simpler algorithm that makes it easier for computers to verify the transactions. Litecoin is reported to handle 56 transactions per second compared to Bitcoin which can only handle 7 transactions per second.
Litecoin is one of the first projects to implement Atomic swaps.
With the help of atomic swaps, the users are able to instantly perform cross-chain transactions i.e. you can exchange your bitcoin for litecoin or vice versa without the need for any centralized exchanges like Wazirx, Binance, etc. With the help of Atomic swaps, you are able to eliminate the middleman. And you don’t have to worry about the exchanges getting hacked anymore as the funds are always kept in your personal wallet when you perform swaps.
Litecoin vs Bitcoin Mining
Litecoin uses scrypt, a simpler and less complex algorithm compared to bitcoin’s SHA 256 algorithm. Unlike Bitcoin, Litecoin doesn’t need much processing power to be mined.
Scrypt is a ‘memory hard problem’ i.e. it needs a significant amount of memory to evaluate compared to bitcoin which uses processing power to solve the problems. So, due to this users can mine Litecoin using CPUs and GPUs available at home and do not need any heavy resources like ASICS (Application Specific Integrated Circuits).
Quick summary of Litecoin: