Litecoin or LTC is a peer-to-peer cryptocurrency developed by a former Google employee Charlie Lee in 2011. It uses blockchain technology to transfer funds between businesses and individuals. Also, the need for any intermediary financial institutions or payment processing services is not required. Like any other leading cryptocurrency, Litecoin has a finite supply, amounting to 84 million Litecoins. The mining process of Litecoin is much faster as compared to Bitcoin, which calls for faster and cheaper transactions.
How Does Litecoin work?
Litecoin involves the creation and transfer of funds via an open-source cryptographic protocol. It uses decentralized blockchain technology for maintaining a public ledger of all transactions. Litecoin works on the same fundamentals as Bitcoin. Although both the cryptocurrencies can be mined, the mining process of Litecoin is faster than Bitcoin.
Blockchain is a public digital ledger that is used for recording all cryptocurrency transactions. Here, the most recent transactions are grouped into ‘blocks’ by using computer software, called ‘miners’. These blocks are then secured cryptographically before they are added to the existing blockchain. With blockchain, the information is coded in a block, and each block is strung together to create a chain. This chain of information forms Litecoin’s transaction ledger.
Generally, blockchain transactions are kept anonymous for safeguarding the users. But, the fact that each user has a public address makes it more vulnerable if the private address of the cryptocurrency wallet gets into the wrong hands.
Mining is the process of securing each block to the existing blockchain network by using computer (mining) software. Once a block is secured, new cryptocurrency units are released. Further, these are injected by the miners directly into the cryptocurrency market. Litecoins are mined by the users, where the miners verify each transaction and create new blocks. To do so, they solve complex mathematical algorithms, making Litecoin a crucial part of the algorithm-based cryptocurrency cohort.
The block confirmation time of Litecoin is around 2.5 minutes, whereas, for Bitcoin, it is around 10 minutes. Therefore, Litecoin transactions are much faster than Bitcoin transactions. Moreover, Litecoin has a market capitalization of 84 million, which is four times as many units as for Bitcoin.
Where to store Litecoin?
Large Litecoin holdings can be stored in both online and offline wallets. There are online wallets like web wallets, software wallets, desktop wallets, mobile wallets, and offline wallets like paper wallets and hardware wallets.
- Online wallets– There are three kinds of online wallets– software wallets, mobile wallets, and web wallets. Web wallets are generally hot wallets that can be accessed through a web browser, for example, Coinbase. Software wallets can be downloaded to Windows, Linux, or Mac systems, for example, Exodus. Mobile wallets are compatible with Apple smartphones as well as android phones. These wallets are designed to work on desktop, using web extensions, for example, Jazz Liberty.
- Offline wallets– Offline wallets are physical wallets that can either be traditional paper wallets or hardware wallets. These are cold storage wallets that offer the best securities as they do not require online operations, thereby minimizing the risk of being hacked.
Possessing a Litecoin wallet is essential even before buying the Litecoin. It is as important as looking for the LTC price prediction before making a purchase. The reason for doing so is that it gives an idea of how far the Litecoin prices can go, thus helping in knowing the profit margin.