The Story Behind Litecoin
Litecoin was first designed to help facilitate everyday transactions for the average consumer or trader. Comparatively Bitcoin was more of a long term storage option. The mining process is much quicker for Litecoin and therefore offers a higher transaction speed at a fraction of the cost. This generally would indicate that the transactions being performed are much smaller in size.
Litecoin is digital currency that offers a decentralized peer to peer transaction solution that is free from government moderating. These can vary by transaction on the business, industrial and consumer level. Offering a public ledger that is accessible and easy to interpret by anyone who wishes to see them. The premise is not all that different from Bitcoin.
How does Litecoin work?
Litecoin is basically a digital accounting and recording of public transactions.
Due to the complexity of the Litecoin mining, it has been scrutinized and questioned on a global level in regards to performance. Litecoin was designed for smaller transactions and was also in turn designed to process these transactions much more quickly.
Number of Coins and Market Cap
Litecoin currently has 4 times more digital currencies in circulation. Sitting at 84 million total coins to Bitcoin's 21 million. Being one of the original altcoins, Litecoin has seen its market cap fluctuate for better and worse over the course of the decade.
Litecoins market cap is significantly smaller than Bitcoins. However, the market cap has been a consistent top 10 coin by market cap during the decade.
Miners are required to solve hash functions in order to successfully be added to the blo0ckchain. Litecoin and bitcoin use different mining algorithms, With the Litecoin script using a hash function instead. The purpose to involve script was primarily to avoid and dominant mining space from ASIC miners. This would allow CPU and GPU-based miners to compete on the same level. With all new systems comes development to stay in relevancy. Scrypt-capable ASIC-based miners have developed systems as time has passed. CPU and GPU based miners have since been put at a disadvantage.
How to trade litecoin
When pricing Litecoin on most exchanges it is paired with the USD. Another way to word this would be that the trader is selling USD in order to buy Litecoin. This is argued to make profit and loss calculations more straight forward. This however, varies on an individual basis.
Litecoin performs a contract for difference (CFD) account that will often carry regional restrictions. This can help an investor use speculation on price movement. The investor does not take ownership of Litecoin. Instead, they are simply using the dollar as an indicator for calculating profit and loss.
CFDs are are products in which the investor can create leverage. This means that you can buy coins at fractional costs. Similar to an options or margin trader. This allows the investor to somewhat decrease exposure and overall risk.
This is not always true. While leveraged trading allows you to magnify your returns, losses will also be magnified as they are based on the full value of the position. Traders must be active when performing a CFD as some are time weighted with significant downside. Using CFD's will require a strategy and focus. The volatility of the crypto market has decimated trading accounts when investors do not take heed of their positions.
What you Should Know about Litecoin
If you already familiar with how Bitcoin works, you’re likely going to have an easy time understanding Litecoin.
Litecoin is a few adjustments of the Bitcoin code that offers different functions.
The coin uses cryptography and places a ceiling on how many coins can be created. There will ever only be a maximum of 84 million LTC.
They use proof of work mining to ensure all miners receive fair compensation.
Litecoin’s mining algorithm was created at the idea of reducing the dominance of specialized mining equipment, though this would later prove unsuccessful. Some "average" technologies can still mine LTC , though the lion share will not be going to them as their proof of work will likely be miniscule.
Litecoin has since proven a valuable test ground for more experimental cryptocurrency features. The experimentation and ability to tweak the code can be seen as a binary investment opportunity.
The "segregated witness" plan which launched in 2017 was able to help the LTC platform execute on processing larger quantities of transactions in a smaller time period. This was excellent in propelling the coins prospects for its global ambitions.
The Final Word on Litecoin
Litecoin has already made some traders into crypto millionaires. Just like Bitcoin it does have a supply and demand economic that may drive up the price in the future. The amount of "lost" litecoins is significantly less than that of Bitcoin.
The algorithm is being updated by senior professionals and the Litecoin team boasts some of the most creative minds in the cryptocurrency space.
Combined with the efficiency it offers as a product and the continual growth it has seen as a product, and as a coin, offers positive sentiment in the investor community.
Litecoin is fundamentally one of the strongest cryptocurrencies on the market and has been in development since the early days of crypto inception.
Litecoin is compared to Bitcoin often for its similarities. If you are a Bitcoin believer, Litecoin is a solid second alternative that created, by all accounts a superior product, but perhaps an inferior idea.