What Is Litecoin LTC? The Silver to Bitcoin’s Gold

What is Litecoin

Speak with a financial advisor about how much you could realistically invest in cryptocurrency based on your unique financial goals. Created by former Google engineer Charlie Lee, Litecoin was one of the first “altcoins”—a name given to cryptocurrencies other than Bitcoin (and sometimes other than Ethereum). One of Litecoin’s original missions was to discourage enterprise-sized miners from gaining control of the mining process by using a different encryption method. However, miners quickly adapted their specialized machines and continued to grow their mining capacity. LTC experienced a remarkable surge in value, marking its most significant one-day percentage gain since June 30, 2023. Trading at $84.39, Litecoin witnessed a 2% increase, pushing its market cap to $6.262 billion.

What is Litecoin

Rather than focusing on its functionality, many investors are interested in Litecoin as a potential long-term holding. They speculate that Litecoin will build relative wealth over time like other investments. Over the previous twenty-four hours, Litecoin traded in a range of $81 to $ 84, showcasing significant movement within the market. The volume of Litecoin traded during this period amounted to $895 million, constituting 0.45% of the total volume of all cryptocurrencies. But it is flexible enough to offer a good mix of high liquidity and store of value to keep it relevant for long-term investors. It’s a useful coin to place a small stake in and use to understand the intricacies of crypto trading.

Scrypt Proof-of-Work Algorithm

That means it’s easier for regular people to earn money from mining Litecoin. It’s been a testbed for protocol changes before their implementation on Bitcoin, reinforcing its complementary role alongside the leading cryptocurrency. For instance, Litecoin was among the first to adopt the Segregated Witness (SegWit) protocol in 2017. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. The purpose of this website is solely to display information regarding the products and services available on the Crypto.com App.

Over the past few years, that reward has decreased via halving to 12.5 LTC as a block award. Most cryptocurrencies can be purchased on cryptocurrency exchanges. Several exchanges can conduct transactions within the United States; many more are outside the U.S. It’s important to note that exchanges within the U.S. are monitored and regulated by the Securities and Exchange Commission to ensure that the best interests of investors and traders are upheld.

How is Litecoin Different From Bitcoin?

This means that signatures necessary for transactions can be stored in a different block on the chain, in order to improve the scalability of the network. When Litecoin was first created, it was just one of a handful of cryptocurrencies. Today it’s one of many — more than 1,300, with more being created every day. While https://www.tokenexus.com/what-is-litecoin-and-how-does-it-work/ it has greater name-recognition than most cryptocurrencies, its market cap of near $10 billion is far less than the biggest players and individual coins are worth much less too. Similar to Bitcoin, Litecoin can be obtained from mining and has a halving mechanism that occurs every 840,000 blocks (roughly 4 years).

What is Litecoin

The Network Value to Transactions (NVT) Ratio of Litecoin showed a significant decline, according to an analysis of Glassnode’s data. This metric is a useful tool for determining the market valuation of LTC. It is computed by dividing the market cap by the transferred on-chain volume expressed in USD. A decline in the NVT Ratio indicates a possible undervaluation of the asset and a likely upward trend in its price trajectory. And even today, more than a decade after its inception, it continues to be a top 20 cryptocurrency.

Litecoin Vs. Bitcoin

Although advertised as accommodating instantaneous transactions, both the Bitcoin and Litecoin networks require time for those transactions to be confirmed by network participants. Litecoin was founded with the goal of prioritizing transaction speed. In theory, this sounds like a significant advantage for Litecoin; however, supply and demand generally dictate prices for commodities and investments—along with consumer and investor sentiments.

Litecoin’s developers decided to go with the Scrypt algorithm because they were worried about ASIC-based miners dominating the network. An ASIC is an application-specific integrated circuit built exclusively for mining a specific cryptocurrency. And over time, the very thing that Litecoin was designed to prevent has happened; ASIC-based miners have adjusted to the Scrypt algorithm and mine at higher rates than CPU and GPU-based miners.

Synthetix Network

However, selling your crypto on a centralized exchange is different than selling it on a decentralized one. For example, if you’re selling your Litecoin on an exchange like Kraken, you’ll need to send your LTC to your Kraken address. Because exchanges are regulated and regulations are still being developed, the places you can buy and sell cryptocurrencies fluctuate.

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