What is Litecoin?
HISTORY OF LITECOIN
Litecoin saw its origins in October 2011 as an alternative option to Bitcoin. Its creator named Charlie Lee is the person who gave rise to this idea and the most important figure in the project. Lee left his job at Google to dedicate himself solely to the creation of Litecoin and to achieve his goals he partnered with Xinxi Wang and Franklyn Richards.
In its main proposals, Litecoin seeks to be a cryptocurrency with a rapid generation of blocks, cheaper commissions and an efficient alternative for payments. This project allows you to make payments quickly, thanks to the fact that it is focused on the eCommerce segment. The launch of its first version was attached with the following message:
“We want to create a currency similar to Bitcoin, a currency that is the silver of the gold of Bitcoin. Several alternative currencies came and have already left, some brought innovation but all had problems. That is why we want the best features that both Bitcoin like these offer. other currencies and create a currency with all the benefits of them but with hardly any of their problems.”
Litecoin defines itself as a Bitcoin clone created directly from its source code. Besides, it declared that some improvements had been made and also some of the variables for the new network and cryptocurrency were modified. So the genesis block of this cryptocurrency saw the light for the first time on October 13, 2011.
Lee, Wang and Richards said that they wanted to solve the deficiencies that Bitcoin has according to them:
-Failure to receive some transactions.
-High cost of both hardware and energy to mine.
-High transaction fees.
The project was so successful that two years later, in November 2013, it reached a market capitalization of one billion dollars.
Litecoin is a cryptocurrency specifically designed for micropayments; While Bitcoin takes 10 minutes to generate a block, Litecoin takes only 2 and allows transactions to be made even faster.
Thanks to this, Litecoin had to create even more coins than Bitcoin and for this reason they decided that the production cap would be 4 times higher. While Bitcoin established a production of 21 million units, Litecoin has a maximum cap of 84 million total units.
Like Bitcoin, transactions with Litecoin (and many other cryptocurrencies) are made on platforms called “wallets.”
HOW LITECOIN WORKS
How does it Work
Litecoin relies on the proof of work consensus algorithm to verify transactions. The proof-of-work protocol is an algorithm used in blockchains in order to avoid abuse of service by confirming operations and issuing new blocks on the chain. Thanks to this algorithm, it is almost impossible to attempt malicious uses of computing power, such as launching denial of service (DDoS) attacks.
A Litecoin address is a form of unique identification for each user that is used to make exchanges (either send or receive) cryptocurrencies quickly and easily.
In the world of cryptocurrencies, the address works in the same way as in the traditional financial system, whether it is to send or receive money transfers. Which is to say, it works like a kind of bank account.
Litecoin is designed as a form of payment. This means that it is possible to accept Litecoin when goods and services are provided. Like Bitcoin, an exchange with Litecoin is simply a transfer of value between two wallets, which is registered in the blockchain.
To send money from a wallet, the emissary must sign the transaction with his private key to prove that he is the owner of the funds.
How is it Obtained?
The algorithm used by Litecoin for mining is called Proof to Work, similar to the consensus algorithm used by Bitcoin. However, Litecoin applies the algorithm with the function known as Scrypt while Bitcoin uses a SHA-256 call.
Now you may wonder, what is Scrypt? It is a key branching algorithm that does not work only with the power of pure hashing like the algorithm used by Bitcoin (SHA-256), it also needs space in RAM so that the algorithms can be solved.
Like Bitcoin and many other cryptocurrencies, it is based on the blockchain system, which allows it to be a fully decentralized and anonymous cryptocurrency. There is no body that regulates the currency, only the nodes of the network are those that validate the different exchanges that the system performs.
Each of the users has an electronic wallet or wallet that allows them to store the different currencies they own completely anonymously, so that no one on the network can know the identity of another user. Keep in mind that if we lose our wallet or password, we will lose all the money we have.