Litecoin is one of the top 5 most popular cryptocurrencies around and it’s not hard to see why. With a creator from tech giant Google, the currency was bound to gain popularity and attention. Here, we look at why Litecoin is currently so in demand.
It’s the silver to Bitcoin’s gold
Unlike Bitcoin’s creator who is unknown, Litecoin’s creator is Charlie Lee, an ex-Google employee. Lee created Litecoin to be the lighter version of Bitcoin, meaning it can process transactions faster and cheaper. Litecoin is often referred to as Bitcoin’s little brother, and was intended to be ‘the silver to Bitcoin’s gold’. By this we mean that Lee intended Litecoin to exist alongside Bitcoin as a complement rather than as a competitor. He did this by looking at the service provided by Bitcoin for high end, large transactions, and made Litecoin provide a similar service better suited for smaller, less expensive transactions.
Litecoin was created in 2011 and is a peer-to- peer cryptocurrency. It can be used to transfer funds between businesses or individuals without the need of a middleman such as a bank.
What similarities and differences does Litecoin have to other cryptocurrencies?
Although Litecoin is based on the same model as Bitcoin there are some differences.
It has more coins
A cryptocurrency holds its value by the having a limited supply to offer. So once a certain amount of the currency has been created, that’s the end of them and no more coins can be created at that point. Bitcoin has a limit of 21 million coins where Litecoin’s limit is significantly higher at 84 million.
It’s much faster
Crypto speed is measured by how quickly a block can be created in the central record book of all crypto transactions. Think of a block like a page in that record book – the faster the page is completed, the faster the transaction occurs.
Litecoin generates blocks up to 3-4 times faster than Bitcoin and therefore can confirm if a transaction is legitimate much faster than Bitcoin. Additionally, it can process more transactions in the same amount of time.
It has a lower market cap
Litecoin’s market cap (a market cap is the amount of fiat money: EUR, GBP etc, currently invested into a cryptocurrency that gives it value) may not be anything compared to Bitcoin’s but it does still rank amongst the top 5 cryptocurrencies based on the number of coins that exist and the price.
It was designed with security at its heart
It uses scrypt algorithm, which is a way of keeping information safe – think of it like a constantly changing mathematical password in the background that keeps data safe. When it comes to mining Litecoin, the mathematical concepts are more difficult to work out therefore this makes it more secure than Bitcoin.
It’s a good investment option
Litecoin is regarded as the best option for an investment as it has seen a huge growth and its prices have been rising. The changes on the market do affect cryptocurrencies and they have shown to be stable, even during inflation.
Online retailer began accepting Litecoin
Major EU retailer Alza, known for e-commerce in electronics, toys, sports, hobby, entertainment, perfume and jewellery, began accepting Litecoin in May 2017 as a method of payment.
All information accurate at time of writing.