Litecoin is a type of cryptocurrency that has recently become popular among investors. It is not as popular as Bitcoin, but many investors still choose it for a long-term investment. Litecoin is the second oldest crypto after Bitcoin and many miners choose the option of Litecoin mining in the current times.
In this blog, we will discuss everything related to Litecoin, how it works, how it is used, its benefits, and disadvantages, and the tips to invest in this crypto.
What Is Litecoin?
Before discussing everything related to Litecoin, let us discuss what is Litecoin. The term Litecoin is a kind of cryptocurrency discovered in the year 2011 by Charlie Lee who was a former engineer in Google.
Litecoin has similar features to Bitcoin with a different algorithm. It is used to complete many daily transactions. This crypto was founded from the open source code of Bitcoin but has several changes. Litecoin does not have any central authority and is not controlled by any institution.
How Does Litecoin Work?
After discussing the meaning of Litecoin, we will further talk about How Does Litecoin Work. It has many things similar to Bitcoin and works on a proof of work mechanism to verify all the transactions.
But Litecoin is also different from Bitcoin in some ways. The maximum supply of Bitcoin is 21 million coins whereas Litecoin’s supply is 84 million coins.
In the process of Litecoin mining, the miners will have to solve the complex mathematical problems known as hashes to earn rewards and add new transactions to the blockchain. No one can alter the blockchain after the block is closed.
The first miner will receive the rewards after solving the hash associated with the transactions by proof of work mechanism. The miner will receive 12.5 LTC after solving the complex mathematical equations.
Solving hashes needs a high computing power, heavy energy and large space. A major portion of Litecoin mining is done by mining farms and pools of crypto miners with the help of crypto mining hardware.
How Is Litecoin Used?
Litecoin is very liquid and can be used in simple trades. This crypto is widely used by many nonprofit associations and merchants in the United States. It is also used in Australia by many customers. This crypto is used in many countries around the globe by 2,000 merchants and stores. One can use Litecoin in regular transactions and payments.
Check Out: Best Litecoin Mining Hardware
Litecoin provides various benefits over other cryptos. Some of the major advantages of Litecoin are listed as under:
Similar to Bitcoin
Litecoin is similar to Bitcoin in several ways. However, it has many modifications and improvements to its underlying blockchain technology to solve the issues. Litecoin has some features similar to Tenebrix and Fairbrix.
These two crypto projects were constructed on the Bitcoin source code. They were previous crypto projects that worked on the scrypt function to replace the SHA-256 cryptographic hash function. This hash function is used even in Bitcoin mining algorithms and improves the resource requirement of the blockchain platform.
Bitcoin mining works on Graphic processing units. Tenebrix mining can be done with the help of a central processing unit by using the scrypt function. The founder developed Litecoin with the help of the same scrypt mining algorithm from Fairbrix. It has many technical improvements.
Improves the speed of the transactions
One of the major Litecoin Advantages is its speed. It is a lighter version of the cryptocurrency and gives a better speed than other types of cryptocurrencies. Litecoin has great speed and can process a new block every 2.5 minutes. It gives a faster speed than Bitcoin which processes a block every 9 minutes. However, the speed of transactions varies according to the platforms and amount of transaction traffic.
Speed makes Litecoin a unique crypto to choose for regular transactions. It is one of the best options for small purchases and day-to-day transactions.
Low Transaction Fees
Another benefit of Litecoin is its low transaction fees. It can be used for small transactions because of its great speed. The great speed of this crypto makes it less risky for double-spending attacks. There are no chances for attackers or hackers to attempt a double-spending attack.
Good To Store
One of the major benefits of Litecoin is its huge supply. While the supply of Bitcoin is 21 million, the supply of Litecoin is capped at 84 million. Litecoin is one of the best assets to hold for a long term to sell during inflation.
No Direct Control Of Any Authority
Litecoin is not controlled by any central or direct authority. It works independently without any financial intermediaries or authorities. Besides, Litecoin can also be used in several countries of the globe for regular transactions.
Litecoin has certain disadvantages that are listed as under:
Litecoin is still struggling hard to come to the top of profitable cryptos in the world. It also has a lower rank than other kinds of cryptocurrencies. Many investors still choose Ethereum over Litecoin for investment purposes.
Reduction In the Market Share
One of the biggest Litecoin Disadvantages is its reduced market share. It is chosen by very few investors for the long term.
Leaves Negative Environmental Effects
As Litecoin needs a high computing power and energy, it also affects environment. Many mining tools emit a large amount of heat that pollutes the environment.
Check out our Blog: How To Mine Litecoin
Should You Buy Litecoin?
Now, the question is whether it is profitable to invest in Litecoin or not. Yes, it is one of the best and safest options to start Litecoin mining because of its several benefits. You can buy a good Litecoin miner and start mining Litecoin at your home. You can get an ASIC Mining hardware to mine Litecoin.
LTC can be used in many regular transactions and is a perfect choice for a long-term investment. It has a lower transaction fee as well. You can conveniently use Litecoin in several countries of the globe.
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