Litecoin FAQs

Coinberry supports a wide range of cryptocurrencies, including Litecoin. While this project hasn’t been as popular recently as it once was, it still plays a vital role in the world of digital assets. Let’s answer some of the more commonly asked questions about Litecoin.

What is Litecoin (LTC)?

Source: Litecoin.org

Bitcoin’s dominance and network congestion make many within the market realize the need for an alternative. As a result, altcoins – or alternative coins – were born. By definition, any coin that is not Bitcoin is an altcoin. These coins, like their predecessor, are designed to solve the challenges that plague the crypto world.

One of the most recognizable altcoins is Litecoin.

Among other altcoins and digital currencies, Litecoin was among the first to hit the market. Built on the Bitcoin codebase, Litecoin was designed to provide an open-source blockchain that was faster and more efficient. 

However, just because it’s an altcoin doesn’t mean it doesn’t share some similarities to Bitcoin. For example, Litecoin uses SHA-256 as its mining algorithm and continues to maintain compatibility with the Bitcoin network and API.

As one of the elder statesmen in the altcoin market, Litecoin enjoys a certain level of cache and popularity. While some of this attention and fame has waned over the past few years, some in the industry believe Litecoin is ready for a resurgence.

Founding Litecoin

There are those within the crypto industry who suggest that the Litecoin blockchain is digital silver to Bitcoin’s gold. Charlie Lee, Litecoin’s founder, never intended for the two to be competitors. Rather, he envisioned the two as complements of one another.

Lee created Litecoin in 2011, envisioning the crypto as a “lighter version of Bitcoin.” For those that understand Litecoin, the intention was merely to create a more convenient and easy-to-use cryptocurrency.

Litecoin’s founder made the project open source so that anyone can make improvement proposals to the network. These LIPs (Litecoin Improvement Proposals) are submitted on Github, then rejected or accepted by the core Litecoin development team.

The Litecoin Foundation is an organization that supports the core Litecoin team. This organization is completely non-profit and focuses on bringing awareness to the Litecoin project. Founder Charlie Lee manages the foundation, along with the lead developer of the core Litecoin team.

What is the Native Token of Litecoin?

Source: pixabay.com

Litecoin network is more like an offspring of the Bitcoin blockchain at its core because they share similar DNA. Plus,  both operate on the proof-of-work (PoW) consensus mechanism. However, Litecoin has a much faster block generation rate which means it can process transactions  10X faster.

The major difference is Litecoin can produce four times more coins than Bitcoin. While Bitcoin has a finite volume of 21 million bitcoins, Litecoin has 84 million. While the difference is vast, it doesn’t mean much, seeing they’re both finite. This is made possible through miners on the network.

How does Litecoin mining work?

Litecoins are released into the network through a process called mining. If you’re familiar with Bitcoin mining, then you have a solid idea of how Litecoin mining works. Computers on the network responsible for validating transactions are called Nodes, and mining serves two purposes. First, creating Litecoin, and then miners use their hardware to secure the network by maintaining Litecoin’s public ledger known as the blockchain.

Based on the same idea as a peer-to-peer network, if a single node goes down on the Litecoin network, it wouldn’t have a detrimental effect. Litecoin’s proof-of-work (poW) consensus can withstand not just 1 but several nodes going offline without impacting operations.

Take note; mining Litecoin and minting new coins is not done solo. 

Litecoin can only be mined as a block, and mining pools are groups of Litecoin miners working together to solve blocks and form the network consensus. Block rewards (new Litecoin created tokens) and transaction fees are distributed among pool members who contributed their computational power. 

If you are wondering if you can mine Litecoins, the short answer is Yes. 

The long answer is, they can only be mined using consumer-grade ASIC-hardware custom-designed to mine Litecoin. It is no longer efficient to mine them with CPU or GPU cards on regular desktop computers.

Mining software (hashing algorithm) is available to the public. Unlike Bitcoin, Litecoin uses the Scrypt algorithm. Scrypt was intended to make it costly for people to perform large-scale custom hardware attacks by requiring large amounts of memory.

How Do The Tokenomics of Litecoin Work?

Litecoins are not entirely anonymous, but previous transactions are obfuscated, making it difficult to trace to anyone. However, anyone can view Litecoin’s blockchain, so if someone wants to view your Litecoin transaction (& balance) on the ledger, they can.

Block Time Reduction

Litecoin’s block time was reduced, allowing it to scale better than its predecessors. LTC is now four times faster than Bitcoin. Furthermore, Lee’s team modified Litecoin’s transaction fee structure to make it more appealing to the general public. Specifically, Litecoin’s fee structure is 1/50th the size of Bitcoin.

The platform’s fee structure is one of its main appeals. It just costs 1/1000 of an LTC to process a transaction, which is impressive. The cost of this small fee does not vary depending on the size of your transaction. You pay the same amount regardless of the size of your transaction. This method is a giant leap forward.

How Many Litecoin Tokens are in Circulation?

Source: coinmarketcap.com

Litecoin has about 70 Million tokens in circulation and a maximum supply of 84 million. If you’re interested in purchasing Litecoin, please visit our platform and quickly add some LTC to your wallet!

Which Wallets Support Litecoin?

Litecoins are best stored in a wallet. There are several available to choose from, and they range from mobile & web to hardware wallets. While searching for a Litecoin wallet, be sure to consider safety, security, and privacy, along with any other features you deem necessary to store Litecoin.

Web-based exchanges wallets allow you to access your coins from any computer but pose a greater risk as the exchange controls the private keys; if the exchange is compromised, your Litecoins could be stolen. But if you want to go through strict KYC verifications, you can go with an exchange.

Some wallets will let you sell and purchase Litecoin. These wallets include a crypto exchange so you can quickly and easily trade your Litecoin for another digital currency. For security, your best bet is a paper wallet, which keeps your private key on a printed piece of paper for safekeeping.

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Additional Litecoin Resources

Want to learn more about Litecoin? You’re in luck! We have additional content and a beginner’s guide here that tells you all about this unique and exciting project.