Litecoin Explained In Simple Terms!
- What is Litecoin?
- How Does Litecoin Work?
- What is Mining?
- Where and how Can I buy Litecoin?
- How Can I Store My Litecoin?
These are common questions asked whenever Litecoin is mentioned. In this article you’ll find the answers to these questions. Lets begin!
Litecoin is regarded to as the ‘silver’ to Bitcoin’s ‘gold’.
Just like the many other cryptocurrencies, Litecoin is a global, digital payment method that uses blockchain technology to transfer and trade “coin”.
Litecoin is one of the oldest decentralized virtual currencies in the crypto space. Satoshi Nakamoto, the creator of bitcoin made the bitcoin code public.
Ever since then, the bitcoin code has been modified to create several other digital currencies. And in 2011, Litecoin was born by Charlie lee. For this reason, coins like Litecoin are referred to as “altcoins”.
However according to Litecoin Foundation, Litecoin uses a different blockchain which allows it to have a faster transaction speed. This explains why Litecoin is used most times for payments of goods and services.
The Founder Of Litecoin
Charlie Lee is the founder of Litecoin. He graduated from MIT after earning his bachelor and master’s degree in computer science.
Working as a Google Engineer, Charlie Lee learnt about Bitcoin from an article in Silk Road in 2011. Immediately, Lee took interest in Bitcoin and started mining.
Litecoin went live in October 2011, after Lee’s first virtual currency, Fairbix failed. It was designed as an alternative currency that uses blockchain technology to increase safety and speed in financial transactions through out the network.
Since it hit the markets, it has attracted the attention of many individuals around the world and its growth has been incredible.
How Does It Work?
Like all cryptocurrencies, litecoin is not issued by a government, which historically has been the only entity that the society trusts to issue money. Instead of being issued by the government, litecoins are created by an elaborate procedure called mining, which consists of processing a list of litecoin transactions. Unlike traditional currencies, the supply of litecoins is fixed. There will ultimately be only 84 million litecoins in circulation and not one more. Every 2.5 minutes (as opposed to 10 minutes for bitcoin), the litecoin network generates a what is called a block – an accounting system of recent litecoin transactions throughout the world.
Check Out: 7 Most Effective Ways To Earn Bitcoin!
How Is Litecoin Mined?
Litecoin mining is the processing of a block of transactions into the litecoin blockchain (digital register). It involves solving algorithm, and being the first to find the solution earns you a reward of tokens as payment.
Here is how it works, in the real world you transfer money to your friend through the bank. The bank here is the third party, it confirms and processes the transaction.
You trust the bank to look after your money and personal information.
However, with blockchain technology used by Litecoin every money you transfer goes directly to your friend. Without a third party like the bank.
Blockchain is a distributed ledger that isn’t controlled by a single person or authority.
This distributed ledger ( like a register) is managed by thousands of miners. They use extra computing power to solve mathematical puzzles. Computers are used for mining because these mathematical puzzles are designed so that no human could solve them.
Mining can be a great way to make a profit while supporting the cryptocurrency community. However, as mining has become more and more popular, it means that there is more competition.
It’s like thousands of people trying to solve the same puzzle. However, whichever miner solves it first, gets the reward! (This mining system is known as PoW/Proof-of-Work).
How To Buy
If you would love to own some coins without mining, you can purchase Litecoin through another cryptocurrency like Bitcoin. You can also purchase some Litecoin with your fiat currency (e.g U.S Dollar). Coinbase for example, allows you to purchase Litecoin with another cryptocurrency or your fiat currency. To exchange other cryptos for Litecoin, here are reliable exchanges:
Everyone can purchase Litecoin, you just have to find an exchange that is supported by your country.
With most the exchanges listed above you can also sell Litecoin.
Never store your cryptocurrency in an exchange!
Where To Store Your Coin
After successfully buying Litecoin, some questions like is it safe to store my coin in an exchange? where should I store my coin? Is it safe to store coins in Coinbase? may arise. It is fine to store a small amount of your coin(s) in exchanges to make small transactions or to trade. But since the inception of bitcoin in 2009, there have been countless amount of hacks in cryptocurrency. And a lot of people have lost money. However, when it comes to storing your coins for long term or safe keeping there are a lot of wallets to choose from.
- Ledger Nano X Wallet
Ledger Nano X is a hardware wallet. Hardware wallets are considered to be the most secure. As a hardware wallet, the Ledger Nano X offers a higher level of security than software wallets alone. This is because they introduce a physical security element to the process of making cryptocurrency transactions, which will protect users from a wide range of potential attacks. Ledger Nano X wallet is able to connect to both Android and iOS through Bluetooth.
- Atomic Wallet
Atomic Wallet is a desktop wallet that is built with security , anonymity and decentralization. What this means is that only you can have access to your Litecoin and transfer them without the intervention of a third party. All passwords and data are stored on the user’s device and not kept on any server. Atomic wallet is supported by Windows, Mac OS and Linux.
- Trezor One Wallet
Just like the Ledger Nano X Wallet, Trezor One Wallet is also a hardware wallet. It’s a device for securely holding cryptocurrency private keys offline in cold storage. By ensuring keys are always offline and by requiring physical interaction to confirm a transaction and prevent theft of your coins. In the world of cryptocurrency, cold storage refers to the practice of storing cryptos offline in other to prevent unauthorized access.
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