Litecoin (LTC) is one of the most prominent digital assets in the crypto market. Created by Charlie Lee in 2011, Litecoin is considered the silver to BTC’s gold.
How does LTC work?
Lee released Litecoin after the creation of his own digital asset known as Fairbix. Fairbix failed, but Litecoin managed to attract the attention of many people. Even though Litecoin had many similarities to bitcoin, it also had some notable differences.
Litecoin was released as an open-source client on GitHub on October 7, 2011. A few days later, Litecoin became operational.
In comparison to Bitcoin, Litecoin has an algorithm called Scrypt, a total supply of 84 million, and blocks of 2.5 minutes. On the other hand, bitcoin has a data mining algorithm called SHA-256, a total supply of 21 million, and a block time of 10 minutes.
Although Bitcoin and Litecoin work similarly, Litecoin lags behind in terms of halves. Bitcoin will experience its 3rd reduction by half next year and Litecoin experienced its 2nd block reward reduction.
Every 4 years, Litecoin and Bitcoin experience a brief reduction in rewards as received by miners, which is one of the most important attributes of some cryptocurrencies.
With lower issuance and increased demand for digital currency, the price of virtual currency is expected to rise faster in the event of a market demand shock. There will be fewer LTCs available to minors on the market for more investors.
Litecoin has also implemented atomic swaps, which allow individuals to exchange coins between chains without having to depend on a third party.
Speed and Transaction Costs
Litecoin has improved transaction speeds in comparison to Bitcoin and it also works for cheaper fees. Litecoin blocking times tend to be close to 2.5 minutes, fluctuating in a narrow range between 2.2 and 2.75 mins. This is exceptionally useful for almost all merchants and ones who accept Litecoin will receive their digital assets in just five minutes.
Litecoin exhibits this advantage over Bitcoin. Bitcoin requires ten minutes to receive a single confirmation. In addition, the fees paid by users are much cheaper than on the Bitcoin network. Average LTC transaction fees are currently $ 0.059, while Bitcoin has average transaction fees of $ 1.54.
In addition, Litecoin is also one of the most liquid digital currencies on the market. It is possible to buy or sell it on different exchanges around the world quickly and securely.
To be able to increase the number of transactions that the network can handle, Litecoin introduced SegWit (Segregated Witness), which allows transactions to be smaller, resulting in more space per block.
Although digital currency offers fast and cheap transactions, the developers of Charlie Lee and Litecoin had to work to be able to avoid the flood attacks. These attacks are linked to a malicious entity which processes several transactions to clutter the network. This increases costs and also slows the entire network.