Litecoin is one of the most popular cryptocurrencies. Launched in 2011, two years after the release of Bitcoin, it was inspired by Bitcoin and aimed to be its lighter version. Even the work mechanism of both cryptocurrencies is very similar, and they also tend to work on the peer-to-peer algorithm.
Of course, Litecoin is not scaled as largely as Bitcoin, which is still considered the godfather of all cryptocurrencies. Bitcoin also has the biggest market cap and the highest value among thousands of cryptocurrencies. In this article, we take a deep look into what Litecoin is, how it works, and how many Litoshis make a single Litecoin.
- Litecoin was launched in 2011 as a lighter, more efficient version of Bitcoin
- A Litoshi is the smallest unit of a Litecoin, similar to a cent in relation to a dollar
- 100 million Litoshi make up one Litecoin
A brief look into Litecoin: What is it?
Litecoin launched a few years after the release of Bitcoin. It only took two years for the developers of Litecoin to come up with something that is lighter, more efficient, and better in some ways. ETH, a competitive cryptocurrency that has been in the second position on the crypto charts for years now, was launched in 2015, four years after the release of Litecoin.
Litecoin was designed by Charlie Lee, who was formerly an engineer at Google. Considering his expertise, there is no surprise Litecoin was built to sustain and improve the ecosystem of cryptocurrencies and make them more convenient for people to use.
Why was Litecoin created?
Charlie Lee created Litecoin with a single aim in mind: to lighten the heavy and robust mechanism Bitcoin was based on. For that, he decided to program and modify the code of Bitcoin core all by himself and improve it further to make it lighter and more efficient. He also added all the useful features of Bitcoin while excluding the ones that are unnecessary or outdated to keep the mechanism even lighter.
The working mechanism of Litecoin - How does it work?
One thing to keep in mind here is that Litecoin is entirely inspired by Bitcoin. Even the creator himself considered the working mechanism of Bitcoin first and then improved the whole code to come up with Litecoin. So, the case here is that Litecoin was designed to be lighter in order to facilitate transactions faster and more efficiently. We all know that Bitcoin transactions are not really fast or efficient, and that is why many businesses even avoid it as a mode of payment.
But what Litecoin decided to do here is lighten the whole working mechanism and broaden their support for smaller transactions rather than going with the bigger ones. In short, Litecoin was developed with smaller transactions in mind, unlike Bitcoin which caters to both. That is why Litecoin can work really well in the retail industry, where people make smaller purchases for everyday items.
The blockchain structure of Litecoin is likewise very similar to Bitcoin’s. It stores all the information regarding the transactions initiated on the network. It can also be considered as a public ledger that anyone can access and take a look at the information regarding each transaction. As for anonymity, anyone would be able to see the sending and receiving address, along with a few other details, but not your exact name and private information. Lastly, the Litecoin blockchain system also works through the miners who have to mine the blocks and verify each transaction before the block can enter the Blockchain.
In the past few years, the Litecoin community and developers have also been working to improve the Litecoin network even further. For that, they launched the Litecoin lightning network and partnered up with SegWit protocol to make the transactions faster than ever.
What are Litoshis?
You should now have an about what Litecoin is and how it actually works. But what about Litoshi? Is it related to Litecoin? It certainly is! To understand it better, take the real-life example of cents that we use as a physical currency in the actual world. Cent is the monetary unit and can be considered as the smallest denomination of a single dollar which equates to one hundredth of a single dollar.
In the case of Litecoin, the smallest unit is a Litoshi, and 100 million of them make a single Litecoin.
How many Litoshi make one Litecoin?
One hundred million Litoshis make one Litecoin, similar to 100 million Satoshis making a single Bitcoin. Litoshis simply make it easier to keep track of their Litecoins. Small investors benefit more as they can count in Litoshis rather than referring to the larger unit of Litecoin.
What is the main difference between Litecoin and Bitcoin?
The main difference between Litecoin and Bitcoin is in their speed, efficiency, and the algorithm both cryptocurrencies use. For the algorithm, both of the crypto assets use a mining mechanism, but the difference is in their chosen type. Bitcoin uses the SHA-256 algorithm in order to mine new blocks, which requires the miners to use enormous computing powers and find the 64-digit hash for every upcoming transaction. Bitcoin mining consumes a lot of electricity as miners usually use mining machines with significant electricity needs.
On the other hand, Litecoin uses the Scrypt algorithm to mine new hash blocks. The Scrypt algorithm tends to use lower computation power in order to solve complex equations; thus, users with low-end computers can also efficiently mine Litecoin.
In speed, efficiency, and transaction time, Litecoin wins the race by miles. Litecoin transactions are usually completed within 2.5 minutes, whereas Bitcoin transactions take around 10 minutes. This is simply because the block size of Litecoin is considerably smaller than the block size of Bitcoin, and that is why it takes time to verify the block and validate the transaction.
Should you invest in Litecoin?
This is the main question that you might be seeking the answer to. There is no doubt that Litecoin is a great project with a bright future. However, things get interesting when we talk about investing in the asset. The entire crypto market has collapsed in the year 2022, and it can actually be a good time for those who are thinking about the longer term. The highest value that Litecoin ever reached was around $400, and it is trading at around $57 on the 18th of September, 2022.
Litecoin also comes with a limited supply of around 84 million coins, which can be an excellent thing for the overall value of the asset. But again, your own research is important here. Make sure to understand the project, consider future opportunities, and evaluate what is coming in the future. Then decide firmly what you want to do.
Among thousands of cryptocurrencies floating around the internet, Litecoin is one of the very few ones that are actually beneficial and holds potential for the future. LTC has been around for over a decade now, and its value has also increased exponentially. Let’s wait and see how the asset performs in the future and what changes the developers will bring to its ecosystem.
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