Bitcoin Australia has been offering a simple way for you to buy Bitcoin and Ether for a long time, so our articles have focused on those cryptocurrencies. As a result, we’ve talked about Satoshi Nakamoto and the Bitcoin Whitepaper. We’ve talked about Vitalic Buterin and the Ethereum project. But cryptocurrency is a big space. What about other cryptocurrencies? What about Litecoin?
Since adding Litecoin (LTC) is on our roadmap, let’s now talk a bit about it.
A Brief History of Litecoin
Litecoin is one of the four most popular altcoins – that is, cryptocurrencies other than Bitcoin. Currently, it is behind Ethereum (ETH), Ripple (XRP), and Tether (USDT), and ahead of Bitcoin Cash in terms of market cap.
It was launched in 2011 by a former Coinbase and Google employee, Charlie Lee. Lee is now the managing director of the Litecoin Foundation. The foundation doesn’t control the cryptocurrency, it just provides resources and increases visibility and credibility. Still, Lee intends to one day step down from the foundation board to prevent the cryptocurrency from becoming too centralised.
How the Cryptocurrency Works
In most ways, Litecoin works a lot like Bitcoin. The key differences are that the Litecoin network blocks are confirmed faster and it’s easier to mine with standard computers than other cryptos. Users of the cryptocurrency say that this makes it easier to use for smaller, faster transactions, similar to PayPal. Indeed, Litecoin is usually seen as an alternative to the Bitcoin network rather than a competitor.
It also helps that at the moment one Litecoin is far cheaper than a bitcoin. So, say that you wanted to buy a cup of coffee, for example. That’s around 0.03 LTC instead of 0.0002 BTC. Granted, it’s possible to make that kind of transaction, and even smaller transactions in Bitcoin. It can just be a little awkward.
Another key difference is that, while Litecoin also has a halving every four years, there are four times more total Litecoin than Bitcoin. Whereas bitcoin is limited to 21 million coins, the Litecoin blockchain can accommodate up to 84 million coins. So, while people are panicking about exhausting the minable Bitcoin in one hundred and twenty years, Litecoiners are sleeping easy.
How It Compares to Other Coins
Generally speaking, the price of Litecoin moves just like the price of Bitcoin. However, those value fluctuations impact Litecoin much more drastically. This is in part because the price is so much lower so value changes are proportionally more drastic.
In this way, Litecoin can also serve as an introduction to cryptocurrencies as speculative assets.
Any true Litecoiner will tell you that the currency isn’t a competitor with Bitcoin. It has its own strengths and weaknesses. It’s a great way to get started in cryptocurrency, to make small transactions, or to diversify your wallet.
*Article updated on December 14, 2020
Jon Jaehnig is a freelance content writer and has a Bachelor’s of Science degree in Scientific and Technical Communication and a minor in Journalism from Michigan Technological University, which he uses to take complex and specialist information and convey it to the general public. Click here to view Jon’s full bio.