What is Litecoin (LTC)?
Litecoin (LTC) is one of the first altcoins. Its blockchain was designed in 2011 by former Google employee Charlie Lee using open-source blueprints for Bitcoin. But Litecoin made several changes, such as speeding up block production and switching to the Scrypt Proof of Work (PoW) mining algorithm.
A finite total supply of 84 million Litecoins is available. Like Bitcoin, Litecoin is obtained by mining and features a mechanism for halving that happens every 840,000 blocks (roughly 4 years). In August 2019, the block rewards for LTC were reduced by half, from 25 LTC to 12.5 LTC. The following halving is anticipated to occur in August 2023.
How does Litecoin work?
Litecoin was created as a modified version of Bitcoin with the goal of making transactions more affordable and effective than on the Bitcoin network. The Proof of Work mechanism is used by Litecoin, just like Bitcoin, to allow miners to create new currencies by adding new blocks to the network. The SHA-256 algorithm used by Bitcoin is not used by Litecoin. Instead, LTC employs the Scrypt hashing algorithm, which can produce new blocks every 2.5 minutes or so, as opposed to the 10-minute average for Bitcoin.
The Litecoin development team created Scrypt in the beginning to create its own independent decentralized mining ecosystem independent of Bitcoin’s infrastructure and to make the 51% attack on LTC more challenging. In the beginning, Scrypt made mining easier to access for people who utilized conventional GPU and CPU cards. The intention was to stop ASIC miners from controlling the LTC mining market. But afterwards, ASIC miners were created to mine LTC effectively, rendering GPU and CPU mining ineffective.
Due to the similarities between Bitcoin and Litecoin, the former was frequently used as a “testing ground” for developers to try out blockchain technology that would later be implemented on the latter. For instance, in 2017 Litecoin adopted Segregated Witness (SegWit) before Bitcoin. SegWit, which was first proposed for Bitcoin in 2015, attempts to expand the blockchain by separating apart each transaction’s digital signature to make better use of the constrained space on a block. The blockchains were able to handle more transactions per second as a result (TPS).
Prior to Bitcoin, Litecoin adopted the Lightning Network, another scaling option. One of the essential elements that improves the efficiency of Litecoin transactions is the Lightning Network. It is a layer 2 protocol built on top of the blockchain for Litecoin. It comprises of user-generated micropayment channels that enable lower transaction fees.
Additionally, by implementing the privacy-focused protocol known as the MimbleWimble Extension Block, Litecoin hopes to address the issue of transaction privacy (MWEB). It takes its name from the Harry Potter novels’ tongue-tie spell, which prohibits the victim from disclosing anything. Similar to the spell, MimbleWimble enables transaction data to remain entirely anonymous, including the addresses of the sender and receiver and the amount of cryptocurrency exchanged. Additionally, MWEB reduces and scales block sizes while removing extraneous transaction information. The Litecoin MWEB protocol is currently being worked on as of December 2021.
How to buy Litecoin on FMCPAY?
You can buy Litecoin from crypto exchanges like FMCPAY.
- Login to your FMCPAY account and go to [Trade]
- Select LTC/USDT trading pair
- Enter the amount of USDT
- Enter purchase number LTC
- Create an LTC buy order
Closing thoughts
Litecoin has shown an ongoing development effort to be “the silver to bitcoin’s gold” since its debut in 2011. While it isn’t as popular as Bitcoin or Ethereum (ETH) in terms of market capitalization, the Litecoin community is expecting further development that can bring enhanced features and use cases.