Litecoin is a cryptocurrency born to be a Bitcoin alternative. Launched in late 2011, it works very similarly to Bitcoin and it is in the top 5 cryptocurrencies in the world right now.
What Is Litecoin About?
Just like Bitcoin, LTC is a peer-to-peer open-source cryptocurrency. It was launched in 2011 via Github, by an employee who later became Engineer Director at Coinbase (a leading cryptocurrency exchange hub).
Although it has proven increasingly problematic for virtual coins to stand out given the level of crowding in the field, Litecoin is one of the few which managed to emerge and be competitive.
As a cryptocurrency, it shares a lot of features with Bitcoin like decentralization, a near-zero transaction cost with no national boundary in the way, and mining.
LTC has a 3 billion dollars market (as of May 2020). Not even close to the 128 billion deriving from the BTC market, but, opposed to many other virtual coins, it can stand a chance and has convenient features.
LTC vs BTC, Similarities:
These two cryptocurrencies need to live up to the standard that is needed in order to continue being used and keep up with the competition. Similarities between the two would be:
Proof-Of-Work: both CC (cryptocurrency/currencies, from now on) take advantage of the safety and the mining process required in order to place a block in the chain.
Decentralization: both CC are decentralized virtual coins, leading to obvious benefit for this specific environment.
Block- Chain: both CC use this system in order to perform secure transactions.
Encryption: both virtual wallets are encrypted.
Mining: both CC can be mined for rewards.
Image source: https://www.reddit.com/r/litecoin/
LTC vs BTC, Differences:
The main differences of these two CC are listed here:
Each LTC block is processed 4X faster than its counterpart. It takes approximately 2,5 minutes to confirm an LTC transaction opposed to the 10-20 minutes required from BTC.
The mining process is fundamentally the same: both require lots of computer power but, instead of hash functions, LTC uses Scrypt which is a faster, easier and more convenient algorithm but requires ASICs (Application-Specific Integrated Circuits) and specialized mining software.
Each LTC block can be mined for 2X the amount of a BTC block (25 LTC per block or 12,5 BTC per block), even though the last one has a whopping 270X higher market value.
For comparison, as of March 2021: the LTC value is about 180$, while BTC is about 48’700$. Hence: the market capitalization of BTC is fundamentally different from LTC’s.
What’s also different is the distribution of the two cryptocurrencies: the max amount of available Bitcoin coins is higher (84 million) than LTC’s (21 million).
Even though mining LTC might sound lucrative right now based on how popular this CC is, there are real-world costs associated with mining activities that are not to be ignored. CPUs and GPUs required to provide the raw computing power for mining are very expensive: hundreds oror even thousands of dollars are needed in order to buy the machines that will do the job.
Mining pools do exist for LTC as well so that a collaboration of miners can work together in order to increase the chance of finding a block. The higher the chance, the lower the reward. Up to the miner whether to cooperate or not.