Looking For An Alternative to Bitcoin? Check Out Litecoin
Litecoin is a digital currency that works with the peer to peer technology just like the majority of cryptocurrencies around the world. As a result, Litecoin enables instant and near zero cost payments to any individual or merchant around the world. Secondly, it is an open source global payment network that is not managed by any bank or government around the world. Lastly, it allows the completion of transactions within a fraction of a second.
Litecoin was developed in 2011 as an alternative to Bitcoin which was gaining popularity thanks to improved technology and ease of transacting with the digital currency. The developers of the cryptocurrency followed the model of Bitcoin and decided to use mathematics as a mode of securing the network. Furthermore, the system was designed to help individuals and merchants to control how they transact.
Thanks to improved technology, Litecoin enables faster transaction confirmation times as well as improved storage efficiency. This is attributed to industry support, improved trade volume and liquidity. At the time of writing, Litecoin had gained more than 1,500% and its price was set at $75.48.
With this in mind, you can finally see the future of Litecoin is bright and it will offer better investment opportunities just like Bitcoin.
Differences Between Litecoin and Bitcoin
If you have kept up with the development of cryptocurrencies like Bitcoin, then the name Satoshi Nakamoto is familiar to you. If not, you need to know that Satoshi Nakamoto is a mysterious figure who until today remains so.
Satoshi Nakamoto developed Bitcoin and the peer to peer technology that majority of cryptocurrencies have come to rely on. He achieved the above by employing mathematics thus securing the network and improving transaction times. Transactions are verified by network nodes and they are recorded on a public distributed ledger known as a blockchain.
When it comes to Litecoin, its founder is widely known. The cryptocurrency was developed by Charles Lee, an engineer who worked at Google. Charles Lee modeled Litecoin after Bitcoin using mathematics to ensure the cryptocurrency uses peer to peer technology. Not only did this help to improve transaction times but it improved storage efficiency. Today, Charles Lee works at Coinbase, one of the largest digital wallets providers and cryptocurrency exchange.
Unlike the legal tender that is managed by commercial banks and governments where it is minted at secure facilities and distributed through formal channels, cryptocurrencies are mined. Mining is the process where several specially designed computers located in a data center are used to solve complex mathematical puzzles.
Once the puzzles are solved, the miners are rewarded with cryptocurrencies which are added to the public ledger. Bitcoin is mined using special computers – ASCI – which are fitted with GPUs instead of CPUs. Why? GPUs were found to be more efficient thus utilized much less power and provided results much faster compared to CPUs. To mine Bitcoin, it takes approximately 10 minutes per block.
Litecoin mining has a major difference from Bitcoin in that a single block is mined every 2.5 minutes. As a result, it has been able to achieve faster transaction confirmation. Furthermore, it has greater resistance to double spending attack happening within a particular duration.
Cryptocurrencies use hash functions in order to generate a new block. When Bitcoin was developed, Satoshi Nakamoto chose to use the SHA -2. Why? It was more secure than others. SHA-2 was developed by US NSA with the goal of securing different protocols for example TLS, SSL and SSH among others. The hashing function used by Bitcoin works together with its proof of work in order to generate a new block. Furthermore, Bitcoin is capped at 21 million coins.
Litecoin uses scrypt together with its proof of work when mining blocks. Scrypt was chosen to avoid providing advantage to the GPU over CPU miners. Unlike Bitcoin, the Litecoin Network is set to generate 84 million Litecoins which is four times the amount set for Bitcoin at 21 million.
Cryptocurrencies have changed the way many people transact with merchants as well as how people send and receive digital currencies. The best thing about digital currencies is that they are decentralized which means no government or commercial bank manage them.
When it comes to Litecoin, it is viewed as the little brother of Bitcoin. Thanks to the rise in digital currency popularity, Litecoin price will likely one day hit the $5,000 mark just like its big brother – Bitcoin.