An in-depth understanding of cryptocurrency helps new traders make the right choice when it comes to digital asset trading. Litecoin (LTC) is one of the leading virtual currencies. Some people would rather call it the little brother of Bitcoin (BTC). Charlie Lee developed it in 2011, and Litecoin has been growing in popularity and adoption ever since. Lee is a former Google engineer and an MIT graduate.
What is Litecoin?
It is a peer-to-peer cryptocurrency that uses the public blockchain to maintain its ledger of transactions. As a peer-to-peer network, Litecoin enables individuals to transfer funds between themselves without the need of a third party, such as a bank. While this transaction takes place, it does not charge either of the two parties. It goes without saying that Litecoin is fully decentralized, as third parties are completely eliminated.
Unique Litecoin Attributes
Without a doubt, virtual currencies have similar characteristics that make them what they are – cryptocurrencies. However, there are unique attributes that differentiate one from another. So, we will quickly lay out the major things that set Litecoin apart from the rest in a big way.
Just like Bitcoin, Litecoin uses the same open-source code, but not without some disparity. In comparison with the speed of Bitcoin, Litecoin’s speed is four times faster than Bitcoin’s. That’s not all. When it comes to the speed at which Litecoin confirms transactions, it is a lot faster on the Litecoin blockchain then Bitcoin given the same time frame. When LTC tokens are wired, they deliver within 10-15 minutes.
2. Number of Coins
Just like every other cryptocurrency that has some intrinsic value, Litecoin does have a pegged number of coins to be minted. Indeed, this means that the moment that the number of coins has been minted, the production will cease. While the maximum number of bitcoins is pegged at 21 million, Litecoin has an 81 million mark.
3. Transaction Fees
With LTC, transaction fees are significantly lower. Also, the longer the block, the more a user will need to pay for their transactions.
4. Market Cap
While the market cap of Litecoin lags behind that of Bitcoin, it is nonetheless ahead of countless other virtual currencies. As a result, it maintains its position as one of the Top 10 cryptocurrencies at the time of writing.
How to Mine Litecoin
Mining Litecoin involves three major processes:
1. Solo mining
Getting involved in solo mining means you will need to use your PC or graphics card to do it. Nowadays, miners use a cryptocurrency mining scrypt called ASIC (application–specific integrated circuit). Notably, the good thing is that they are more powerful than your regular CPUs and GPUs, thus helping you to win mining rewards a lot faster. Keep in mind, however, that you will need a cost-efficient power source as it is an energy-consuming process. Also, you may need to buy a solid air conditioning unit to continuously cool off your system as you mine. Though, the advantage lies in the fact that you won’t share your reward with anyone.
To mine from the comfort of your home, follow these steps:
- Create a Litecoin wallet for storing your LTC.
- Choose either GPU or ASIC mining rig.
- After selecting the mining software of choice, install it.
- Start mining after reading the instructions on the software package carefully.
2. Mining Pool
- Just as in the previous step, create a Litecoin wallet.
- Choose your mining hardware.
- Install the chosen software for mining.
- Choose a mining pool: mining pools are groups that miners form for the purpose of mining Litecoin. With the mining pool method, the miners bear the cost together and share the rewards as well. Note that some pools will recommend particular software for mining.
- Start mining. While at it, ensure you move your LTC to a wallet.
3. Cloud Mining Service
- Choose a cloud mining company. Ensure you do some research to find out the available ones that suit you the most. Also, do not forget to find out the benefits they offer. Indeed, they offer different packages.
- Select their mining package. These cloud mining service providers always have mining packages. Settle for one that is the most appropriate for your needs.
- Select a mining pool. This is the next step to take after selecting a mining package. Once again, make sure you compare all the existing options before committing to one.
- Start mining Litecoin through the cloud.
How to Buy LTC
You may not have the time to start mining Litecoin, but you may want to own it. So, simply buy it. Doing so is not rocket science as all you need to do is to buy it with fiat currency, such as the US dollar, or other cryptocurrencies, such as Bitcoin. On Coinbase, for instance, you can purchase LTC using USD. Take the following steps to buy LTC from Coinbase:
- Sign up on the website.
- Connect your payment option. Your payment option could be your bank account, debit or credit card.
- Pay for some LTC.
As you can see, this process doesn’t require you to convert to an existing cryptocurrency since you presumably don’t have any at the moment. Yes, you pay with fiat currency of your country.
So far, we have been talking about Litecoin wallets without looking at the types of wallets that exist today. Like Bitcoin and other altcoins, users store Litecoin in digital wallets. It’s noteworthy that wallets come in many types. Let’s break them down:
- Software wallets: These are the software-based digital wallets which reside on your mobile devices and computers. Software-based wallets are currently in-vogue and are sometimes called mobile wallets.
- Hardware wallets: Similarly, there are physical hardware wallets, which are hardware devices specifically developed for managing public and private addresses.
- Paper wallets: Apart from Software and Hardware wallets, there is yet another type of wallet called a paper wallet, which is now outdated. They are quite technical and require much care when using them.
- Web wallets: Similar to software wallets, web wallets can easily be connected to the internet. To access them, a user will need web browsers, such as Google Chrome, Firefox, Edge, Opera, and others.
This article should not be taken as, and is not intended to provide, investment advice. Users are ultimately responsible for the investment decisions he/she/it makes based on this information. It is your responsibility to review, analyze and verify any content/information before relying on them. Trading is a highly risky activity. Do consult your financial adviser before making any decision. Please conduct your thorough research before investing in any cryptocurrency and read our full disclaimer.
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