What is Litecoin (LTC) and how does it work?
Designed as a response to perceived shortcomings of Bitcoin, Litecoin is an Altcoin that is promoted as the cryptocurrency that offers faster transactions, lower fees, and a larger number of coins in circulation. Of course, the use of blockchain technology is necessary. It is the ideal type of crypto for paying for goods and services online and also for gambling in crypto casinos.
Litecoin was designed to challenge the heavyweights of cryptocurrencies, particularly Bitcoin. Many of Litecoin’s aspects were developed in response to what was perceived as a failure of the basic model used by the world’s first mainstream cryptocurrency.
Litecoin (LTC) is the native cryptocurrency of the Litecoin platform, which was launched in October 2011. Charlie Lee, a former Google employee, and his colleagues created Litecoin as a “fork software” of Bitcoin’s main client. Although it does not share the transaction history with Bitcoin, it is still based on Bitcoin’s code.
Lee’s main ambition is to create a global decentralized payment network similar to Bitcoin, that performs its role without the defects that are supposed to afflict Bitcoin. Lee has synthesized this concept by stating that Litecoin will be defined as “the silver to Bitcoin’s gold.”
What is the purpose of Litecoin (LTC)?
This coin aims to abandon the value accumulation model and become a decentralized means of transferring money for practical and everyday use.
Litecoin developers consider performance speed a key factor in promoting the adoption of cryptocurrencies by the traditional public. To begin with, Lee and his team consider Bitcoin too slow for regular and frequent transactions. In addition, the growth of the Bitcoin network size is described as unable to provide a parallel increase in performance, creating scalability and bottleneck problems.
The Litecoin network is designed to verify transactions at a faster rate. In this sense, LTC challenges Bitcoin: its average verification periods last about two and a half minutes, which means that it can form up to four blocks of equal size within the time a single block of Bitcoin is confirmed. In combination with the implementation of Lightning Network and Segregated Witness (SegWit), developers hope that this feature will make this currency a viable payment option for both merchants and regular users.
LTC had to focus on lower transaction fees to beat the competition from Bitcoin. In fact, rising transaction fees have been identified as another problematic aspect of Bitcoin. As an alternative, LTC proposed to offer the same or better features at lower costs. With this crypto, transaction fees are closely related to the size of the transaction and the size of the block involved, leaving the transaction amount out of the calculation.
At the beginning of 2019, the fee per KB amounted to about $0.05. Developers promise that new currency updates should reduce these fees to around $0.005. All of this should make LTC more appealing to those who feel that transaction fees for small daily purchases add up too quickly.
Over time, Litecoin has focused more on privacy, adding a commitment to protecting anonymity to its list of priorities. Charlie Lee indicated 2019 as the year in which LTC begins to explore new territories when it comes to improving its privacy features. Private transactions are a new feature planned for the Litecoin network, with the possibility of implementing them via soft fork rather than hard fork. Some of Litecoin’s efforts in this segment involve researching ways to integrate the Mimblewimble protocol with the help of the team behind the Beam Coin. Once fully implemented, the technology will allow on-chain conversion of regular LTC to its Mimblewimble variant and vice versa.
The fungibility of Litecoin
In addition to privacy, the collaboration between LTC and the privacy coin Beam should help LTC strengthen its fungibility offering, the only characteristic of “good money” that is supposed to be missing from both Bitcoin and Litecoin, according to Litecoin founder Charlie Lee. The goal is to ensure that all circulating LTC tokens have the same value, as newly created tokens are sometimes considered more valuable than those that have been used in illegal operations.
To avoid the existence of “contaminated” coins, the Litecoin team is relying on what is already planned for the confidential transaction function. Thanks to it, recipients of certain funds will be able to decide not to accept the transaction based on its previous history and refuse to do business with suspicious parties altogether.
Availability of Litecoin
As of September 2019, there were over 63 million LTC tokens in circulation, out of a maximum availability of 84 million units. At the same time, the currency’s market cap was over $4 billion USD, placing it in the top 5 coins based on its value.
LTC is readily available for trading on several cryptocurrency exchanges, including Binance and CoinSmart. The acquired tokens can be stored in all the most popular wallets.