Since the birth of cryptocurrency and its longtime leader, Bitcoin, there has come a string of altcoins to give traders a larger variety of options. With the want – and need – to establish a new cryptocurrency based on the aspects of an already existing cryptocurrency, we see the opportunity for improvement and upgrades without modifying the original crypto. Litecoin is one of these alternative coins to Bitcoin. Here is everything you need to know about Litecoin and its predecessor.
Litecoin is a cryptocurrency, an “altcoin” because it is an alternative currency to Bitcoin. This altcoin was created as a Bitcoin fork and uses the Bitcoin source code and blockchain.
What is a Bitcoin Fork?
A fork is essentially a way of creating a new cryptocurrency based on another existing cryptocurrency by forking off the original crypto’s blockchain. Technically speaking, this happens using the source code and blockchain and to duplicate it in order to make adaptations and changes or by splitting the existing cryptocurrency into two parts based on a decision from that cryptocurrency creator.
A Bitcoin fork is a new cryptocurrency that has been created based on the Bitcoin source code and blockchain and adapted after the source code has been cloned. Therefore, these currencies have elements of Bitcoin but are designed to address some of the fundamental Bitcoin issues.
What are the differences between Litecoin and Bitcoin?
The key main differences between Litecoin and Bitcoin come together to show Litecoin being faster, cheaper and smaller than Bitcoin.
- The quantity of Litecoin available to be mined is much larger than Bitcoin’s. This means a lower price per unit, the market cap of Litecoin is 70x lower than the Bitcoin market cap, which sits at $1 trillion.
- The speed of both mining and transacting Litecoin is faster than Bitcoin.
- The biggest difference, however, lies in the algorithm. Both algorithms require substantial blockchain technology to mine, but Litecoin has forgone the Application-Specific Integrated Circuits (ASICs) hardware systems that Bitcoin miners use. In layman’s terms, this less specialized approach opens the mining process up to any users who have the computing capacity and who wish to join in the mining game.
What are the similarities between Litecoin and Bitcoin?
Due to the fact that Litecoin was created based on Bitcoin, to be the successor and runner-up to Bitcoin means that there are similarities between the two currencies.
- Both are decentralized forms of currency – finance free from central interference and governance.
- Both work based on a proof of work system, which essentially means the coins are mined and established and then put into a public ledger.
- The means of storage and transaction for both currencies are similar, with the coins being mined and exchanged or traded, and kept in a cold or digital storage wallet for safeguarding while not in exchange.
How to use Litecoin
Litecoin use-cases vary from country to country. Mostly, the altcoin is seen as a value-store and an investment option rather than as a manner of transacting.
Most leading cryptocurrency exchanges offer Litecoin for trade and transaction. This means you can buy and sell Litecoin in exchange for fiat – national tender – or for other cryptocurrencies available on the exchange.
As with Bitcoin, the value of Litecoin is fluctuating and changing, but currently, a single Litecoin is valued at $259. This is a lower value than Bitcoin but is a worthy opponent based on it offering a faster, cheaper and less risky option to the crypto-leader.