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Understanding The Dynamics Of Litecoin

By Shubham Joshi

Litecoin (LTC) is a cryptocurrency created from a fork in the Bitcoin blockchain in 2011.It was first created to address the developer’s worries that Bitcoin was becoming more centralized and to make it harder for large-scale mining companies to dominate the mining industry.

The cryptocurrency reinvented itself as a mineable coin and a peer-to-peer payment system, although ultimately failing to stop commercial miners from monopolizing the majority of Litecoin mining.

One of the initial goals of Litecoin was to prevent large-scale miners from taking over the mining process by employing a different encryption technique. However, miners continued to expand their mining capability and soon modified their specialized equipment.

A Brief History of Litecoin

Litecoin launched its network in October 2011. Most of the source code for Bitcoin was taken by LTC, which also included a quicker block generation time, a larger maximum token supply, a new hashing algorithm, and a slightly altered GUI. 

Charlie Lee, an early Bitcoin miner and former Google software engineer, led the development of Litecoin as a lighter version of BTC. One of the most popular cryptocurrencies, LTC has consistently been in the top 10 cryptocurrencies by market cap for the most of its lifespan.

The first block reward for Litecoin was 50 LTC, with the block reward splitting every 4 years. The final Litecoin is predicted to be mined by the year 2142.

Halving

Halving refers to reducing the reward given when a block’s hash and the transaction information within the block are validated and a new block is created.By halving, the quantity of Litecoins given is cut in half, which slows down the production of new coins.

Scrypt, which is pronounced “es-crypt,” is the hashing method used by Litecoin. SHA-256 is faster and uses less memory than Scrypt.However, it gained more support from the cryptocurrency community after the 2011 Tenebrix project upgraded Scrypt to support mining on standard CPUs.

Litecoin Developments

Litecoin has changed from having a mining environment where individual miners predominated to a corporatized arrangement where massive mining pools operated by tech companies make up the vast bulk of Litecoin mining.

It has a much lower market capacity than more popular coins.

How is Litecoin Different from Bitcoin?

The first difference between Litecoin and Bitcoin lies in their maximum supply cap. While Litecoin’s supply is limited to 84 million, Bitcoin has a supply limit of 21 million. 

Another distinction between Litecoin and Bitcoin lies in the protocols to mine coins.As was already noted, Litecoin depends on a modified version of Scrypt whereas Bitcoin generates coins using SHA-256. The processing timeframes for each currencies’ transactions are affected by the different protocols.

When processing and confirming transactions, Litecoin is four times faster than Bitcoin. Due to the fact that there are fewer rounds of transaction verification, speed in processing transactions may come at the price of security. Litecoin’s confirmation time of 2.5 minutes as opposed to the roughly 10 minutes that Bitcoin takes to confirm transactions is convenient for small merchants who do not want or need their transactions to be super secure.

What Is Better, Litecoin or Ethereum?

Litecoin is a cryptocurrency designed for peer-to-peer transactions. Ethereum is an ecosystem that runs on a global virtual machine that powers many different cryptography-based technologies.

Ether (ETH), a currency utilised by Ethereum, is used to speed up transactions on the Ethereum network.ETH often ranks in the top five in terms of value and has higher trading volume. Which is superior will depend on your preferences, objectives, and planned purposes.

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