What is Litecoin?
Litecoin (LTC) is a fully decentralized alternative cryptocurrency that was brought to life by Charlie Lee (a former Google employee) in 2011. It imparts numerous likenesses to Bitcoin and originates from its source code. Litecoin was intended to be a better global payment network for everyday usage, providing faster transaction speed, easier trading, and less expensive transactions. Like many other cryptocurrencies, Litecoin uses blockchain technology as the main infrastructure of its operations. LTC is said to be silver to Bitcoin's gold.
The Litecoin project
How does Litecoin work? Both Bitcoin and Litecoin use blockchain technology, but the main differences are, that Litecoin is capable to process and confirm transactions faster on the network, and handling more transactions makes trading and payments cheaper in this currency. Litecoin development team achieved this improved performance by having block confirmation time of 2.5 minutes. This way transactions are much faster than Bitcoin which takes around 10 minutes with new blocks. Each peer-to-peer transaction between two parties is then recorded on one of the blocks of the chain.
LTC is built upon the same open source fundamentals as Bitcoin. Both BTC and LTC can be mined with dedicated mining tools and specialized hardware like asic miners. As a result of this type of mining operations, orphaned blocks can occur on the network. Orphaned blocks are created when two miners mine a block at roughly the same time, both blocks are initially accepted by the blockchain but later one of the blocks is rejected. It makes use of Segregated Witness (SegWit) to reduce the proliferation of orphaned blocks created by its low block confirmation time.
Litecoin also uses the Lightning Network which is an off-chain system of payment channels powered by smart contracts and designed to facilitate direct transfer of digital assets between users. Using the Lightning Network, users can make trading deals without synchronizing with the LTC blockchain all the time. Data about transactions is be transferred via off-chain payment channels.
Another Litecoin development technology is Atomic Swaps, which provides interoperability to the blockchain, allowing the exchange of different cryptocurrencies without actually having to go through an exchange.
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How to buy Litecoin?
You can buy Litecoin through exchanges and brokers. Always take into consideration the risk of investing in digital assets.
The first thing to know about buying Litecoin is that you will need two things:
- A place to buy it — an exchange that provides trading of digital coins and tokens
- A place to store it — digital wallets or other wallet solutions
Decide where to buy Litecoin. Cryptocurrency exchanges like Coinbase and a few traditional brokers like Robinhood or eToro can get you started investing in Litecoin.
Think about how to store your cryptocurrency. Are you going to keep your Litecoin in a hot wallet or a cold wallet? The main difference between hot and cold wallets is whether the wallet is connected to the internet or not. Mobile wallet, desktop wallet or maybe paper wallet is more suitable for you? It's up to you to decide considering the security of your digital money vs how easy it is to access your investment.
Make your cryptocurrency purchase. Figure out how much you want to invest in Litecoin.