Should you invest in Litecoin (LTC)? – Litecoin (LTC) is a major cryptocurrency, just like Bitcoin (BTC) and Free Ethereum (ETH) . It follows in the footsteps of Satoshi Nakamoto’s work, with some significant improvements in terms of decentralization, scalability and speed of transactions. Come and discover our review on Litecoin!

The origins of Litecoin: founder, date of creation, team

Litecoin was created by Charlie Lee in 2011 , who is a former Google employee and subsequently served as the director of engineering at Coinbase. The litecoin code and how it works is based on that of Bitcoin news. Litecoin is one of the first altcoins to emerge in the cryptosphere, alongside the 7 others of the time: Namecoin, Ixcoin, I0coin, Solidcoin V1 & V2, GeistGeld, Tenebrix and Fairbrix.

To finance the development of the project and the adoption of Litecoin, Charlie Lee and Xinxi Wang created the Litecoin Foundation in April 2017 . Xinxi Wang has invested in many tech projects, including Blockfolio which is a cryptocurrency trading application acquired by FTX in 2020.

What are the objectives of Litecoin?

Like Bitcoin, Litecoin aims to become a decentralized peer-to-peer payment system.

It has, however, undergone a few changes compared to Bitcoin. Improvements which should in theory allow it to better fulfil its role as a digital currency and as a peer-to-peer transaction system without an intermediary.

These changes concern in particular the facilitation of mining of LTC compared to that of BTC (see next section) as well as it’s limited total supply, but 4 times higher. It actually amounts to 84 million, against only 21 million for Bitcoin.

Litecoin mining: algorithm, block reward, halving

Just as Bitcoin, litecoin uses the proof of work (or proof of work) as a consensus mechanism. Miners who keep the network secure receive block rewards in the form of new LTCs as compensation.

This block reward is divided by 2 every 4 years. This mechanism called halving allows increasing the scarcity of litecoin over time, which also increases its value. Initially, litecoin miners were given 50 LTC as a block reward.

However, LTC mining differs from Bitcoin mining on at least 3 points:

  • Litecoin uses the Scrypt hash function , against SHA-256 for Bitcoin: block mining with the Scrypt hash algorithm is much faster and less expensive than that with SHA-256;
  • The fastest block creation (as mentioned above): the average interval between the generation of two blocks is two and a half minutes litecoin and 10 minutes to Bitcoin;
  • mining difficulty adjusted more frequently  : the mining difficulty of Litecoin changes every 2 days in order to keep the average interval of 2 and a half minutes between each block creation. In comparison, Bitcoin mining difficulty is adjusted every 2 weeks.

What is the evolution of the price of Litecoin?

From 2011 to 2013, the price of bitcoin fluctuated in a range of between a few tens of cents and 3 dollars. It hit an all-time high (ATH) above $ 410 in 2017. Upcoming halvings, as well as increased adoption, could allow LTC to hit new ATHs.

Litecoin has been one of the top 20 cryptocurrencies in terms of market capitalization in recent years. He was even in the top 10 of this ranking for a certain period.

Where to buy and sell Litecoin?

You can buy or sell Litecoin easily on most major exchanges. The Kraken exchange also makes it easy to sell or buy LTCs through a wire transfer. The platform allows both fiat / fiat, fiat / crypto and crypto / crypto exchanges . Buying and selling Litecoins is also available on Binance. Exchange users can acquire LTCs, using debit or credit cards (VISA or MasterCard) or by making a wire transfer.

They can also sell or acquire LTC on the cryptocurrency exchange registered with the AMF in France, Coinhouse, using a credit card or via a wire transfer. Other major fintech players, like Revolut and PayPal, also allow their users to trade LTCs.

Storing LTCs: Cold Physical Wallets

The Litecoins can be stored safely in the cold physical wallets brand Ledger, as Ledger Nano S and Ledger Nano X.

The cold physical portfolios Trezor designed and sold by SatoshiLabs are also used to store bitcoins and keep them safe from online hackers.

What are the advantages of LTC?

  • Litecoin mining is easier than Bitcoin mining and does not require expensive machines with high computing powers  : initially, the Scrypt algorithm’s preference over SHA-256 was aimed at enabling Litecoin mining with a simple computer, unlike Bitcoin mining which today requires GPUs or ASICs, powerful and particularly expensive mining machines.
  • Litecoin transactions are cheaper and faster than Bitcoin transactions . Litecoin is better able to fulfill the mission of a decentralized peer-to-peer transaction system than Bitcoin. The latter nevertheless has its second layer, the Lightning Network, which is much more suitable for making payments in Bitcoin.
  • The MimbleWimble update proposed in 2019 by the Litecoin Foundation, improves the confidentiality of transactions on the network and the fungibility of Litecoin .

What are the disadvantages of LTC?

  • Using the Scrypt hash function makes mining less expensive and transactions faster, but this algorithm would theoretically offer a lower level of security than SHA-256  : this security weakness has yet to be found. been proven in practice, and Litecoin has worked without major issues since its inception. Litecoin mining certainly had a bug in its early days, with 500,000 LTCs issued instead of 28,800 LTC during the first 24 hours. But to put it in perspective, even Bitcoin had suffered an attack that instantly caused 184 billion Bitcoins to appear on the blockchain on August 15, 2010. Satoshi Nakamoto has improved Bitcoin’s shielding ever since.
  • Litecoin is less rare than bitcoin  : this is only a disadvantage for investors who rely solely on the increasing and high scarcity of a cryptocurrency, in order to hope for its price to appreciate over time.