How it works, its features and comparison with Bitcoin – Gadgets to use

Litecoin (LTC) is a decentralized open source cryptocurrency created to be an alternative and stable coin compared to Bitcoin. It is 14. the largest crypto coin market capitalization. The goal of Litecoin was to be a cheaper and faster alternative to Bitcoin that can be easily mined. In many ways, Litecoin was the first alternative coin. We will take a closer look at Litecoin, its unique features and what distinguishes it from Bitcoin.

Also, read | Explanation of the metaverse: its use and the role of cryptocurrency in the metaverse

Explaining Litecoin

Litecoin was created to be a Lite version of Bitcoin, hence the name Litecoin. He created it Charlie Lee back in 2011. Charlie Lee was a software engineer at Goggle at the time. It shares many aspects similar to Bitcoin Scheme of proof of work but it is easier and faster to create blocks and verify transactions. Litecoin has been an alternative to Bitcoin since it was created. But due to market saturation and even more advanced cryptocurrencies such as Ethereum, it failed to get much traction.

It is cheaper and easier to dig. The transaction fee is relatively low compared to Bitcoin or Ethereum. But unlike other coins, Litecoin’s offer is fixed at 84 million and there will be none more. This is done to maintain the value of Litecoin in the market. Photon is a cocoon of Litecoin just as Paise is in rupees. Let’s take a look at some of the unique features of Litecoin that set it apart.

Also, read | Simple steps to convert Bitcoin and other cryptocurrencies into cash

Characteristics of Litecoin

There are several different aspects and characteristics of Litecoin that set it apart from other cryptocurrencies. These unique characteristics are the reason why Litecoin has developed a huge community over the years. Let’s look at some of these features.

Scrypt Hashing algorithm

Litecoin uses a proof-of-work scheme in which different computers compete to confirm a transaction and earn prizes. This is called mining. People had to use really powerful computers in the race to see who was the first to confirm the transaction. This not only consumes a lot of electricity, but also means that many people cannot participate in this process. How powerful computers are not easily accessible.

To solve this problem, a new algorithm called Scrypt Hashing algorithm. This Litecoin has become even more decentralized to the point that people can dig it up even with their less powerful personal computers. And earn Litecoin as a reward.

Lightning Network

Litecoin can execute 54 transactions per second. 54 transactions is not a huge amount of transactions, so Litecoin has adopted the Lightning Network to achieve more transactions. It was the first cryptocurrency to adopt the Lightning network. Lightning Network is a Layer 2 protocol that helps speed up transaction processing. This allows thousands of transactions to take place within one second.

Merge Mining

Litecoin uses the Scrypt hashing algorithm to allow a wider audience to mine Litecoin and confirm transactions, but it has also allowed people to mine another coin at the same time without using multiple resources or electricity. This gave the miners an even bigger incentive to mine Litecoin as they can mine 2 coins at a time. This is called Merge Mining. Any other coin using the Scrypt algorithm can be merged by digging with Litecoin.

Popular mem coin Dog it also uses the Scrypt algorithm so miners often dig it along with Litecoin to increase the rewards they earn.

Also, read | 3 best ways to earn passive income from cryptocurrency

Bitcoin VS Litecoin

Litecoin was originally created to be a lighter and much faster version of Bitcoin after the success of Bitcoin. Bitcoin had its problems that Litecoin tried to overcome using the features we talked about above. One of the biggest hurdles with Bitcoin is the speed with which it can add a block to its blockchain and how quickly it can confirm transactions.

Fast speed

Bitcoin can add a block every 10 minutes. And perform 7 transactions per minute.

Litecoin, on the other hand, was able to run faster and reduced the speed of adding blocks by 4 times.

Litecoin can add a block every 2.5 minutes. And perform 54 transactions per minute.

Litecoin also used the Lightning network to allow thousands of transactions to take place per second. All of this has allowed users to complete transactions faster without paying a large transaction fee compared to Bitcoin. The fee for a Bitcoin transaction can be anywhere in between $ 2-10 while for Litecoin approximately $ 0.1-0.2.

Better accessibility and less intensive resources

Bitcoin uses a Proof of PoS work a scheme that allows users to compete for transaction validation. only the winner can receive prizes. The problem is that it ends up taking up a lot of resources and power and only the most powerful computers can win. Litecoin fixed this using the Scrypt algorithm and even the playing field, so now even people with personal computers can participate in the PoS scheme.

It also allowed the miners to dig up 2 coins together so they could increase their rewards without using more resources or electricity.

Coin supply and market capitalization

Litecoin also has 4 times the supply of coins than Bitcoin. Bitcoin has stocks 21 million coins and there will never be more than that. Litecoin has stocks of 84 million coins which is 4 times more than Bitcoin. But that affected the value of Litecoin in the market. Bitcoin currently has the largest market capitalization and holds first place while Litecoin is in 14th position.

Related article What is NFT? How do NFTs work and should they be invested in?

Wrapping Up

Litecoin introduced many new possibilities for later altcoin. Being the first altcoin, he has gained a lot of community support and still has a growing list of supporters. He managed to pave the way for a faster and flawless experience of transactions that was not previously possible with Bitcoin. We hope we have helped you explain Litecoin, how it works and its features.

You can also follow us for current technology news on Google News or for tips and tricks, reviews of smartphones and gadgets, join GadgetsToUse Telegram Group, or subscribe to the latest review videos GadgetsToUse Youtube channel.

Source link

Naveen Kumar

Friendly communicator. Music maven. Explorer. Pop culture trailblazer. Social media practitioner.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button