Bitcoin was founded in 2009 and it is, without doubt, the most recognized cryptocurrency in the world. However, Satoshi Nakamoto’s brainchild isn’t the only digital currency that is popular among investors and crypto enthusiasts. With time, Bitcoin transactions started taking longer due to a huge backlog of transactions, which leads to higher fees. Ever since then, many people have become interested in alternative cryptocurrencies – altcoins.
Today, we will talk about the world’s 4th cryptocurrency by market capitalization: Litecoin.
How did it start?
Back in 2009, Satoshi Nakamoto has released its Bitcoin with an open source code, which means that it can be modified and used for similar projects. The majority of cryptocurrencies have been built based on Bitcoin code.
Litecoin wasn’t an exception. The cryptocurrency was introduced to the market in 2011 by the developer Charlie Lee, who used to work for Google. The main purpose of the new product was to eliminate the issues faced by Bitcoin. The way Litecoin works is very similar to Bitcoin. Both cryptocurrencies exist as blockchain. Transactions are being processed by the nodes, and miners provide security and verify each one of those transactions. In some ways, Litecoin is a direct competitor to Bitcoin. It was meant to become the lightweight version of the most popular cryptocurrency. Bitcoin is often compared with “digital gold”. In this case, Litecoin is the “digital silver”.
Litecoin vs. Bitcoin
The total amount of Litecoins is four times bigger than that of Bitcoin: Litecoin has a coin limit of 84 million, while the king of cryptos only offers 21 million coins. Each new Litecoin block is being processed within 2.5 minutes. Bitcoin blocks take significantly more time: a new block is added to the blockchain every 10 minutes. Faster transactions allow Litecoin to process more transactions at a time, decreasing the risk of double-spending (successfully spending the same coins twice by sending two conflicting transactions into the network).
Litecoin market cap has recently surpassed the $2 billion mark. The cryptocurrency is currently trading at $38.43 Such movement is a result of a successful SegWit activation, causing Litecoin to jump three spots on market capitalization leaderboard to be the the world’s number four digital currency. Before that, the cryptocurrency was ranked seventh. The Chinese government lifting the ban on the Bitcoin/Litecoin withdrawal was another reason for the upward movement.
Relatively low costs of Litecoin as compared to the three main cryptocurrencies make it affordable for the masses. The mining process is much more CPU friendly as compared to Bitcoin. Litecoin effectively uses CPU, which restricts the usage of ASIC miners and makes GPU mining less favorable as compared to CPU. In other words, Litecoin can be mined with a regular PC, without buying expensive hardware.
An important decision
Charlie Lee, the creator of Litecoin, has recently decided to quit Coinbase. According to the announcement he made on his twitter on June 10th, the developer chose to step down from his duties and fully dedicate himself to his brainchild:
Today’s my last day at @coinbase! I will miss working with you all. I’m going to shift my focus to Litecoin now. To the moon!
Shortly before that, Coinbase has added support for Litecoin. Charlie Lee’s decision was the first major event for the Litecoin community since the activation of SegWit, which has caused a huge price rise in March. Judging by the overall positive reaction to Lee’s twit, we are likely to see another surge upwards sometime soon.
When it comes to cryptocurrencies, they all have similar advantages: anonymity and decoupling from government control over the purpose and the amount of the digital coins. You can trade them freely on any exchange platform you like, without the inflation risk. Growing interest for Litecoin indicates that the cryptocurrency is here to stay. It will continue playing its role as “digital silver” and digital asset.