The popularity of Bitcoin has inspired the creation of other cryptocurrencies that offer similar benefits. One of those is Litecoin. Introduced on October 7, 2011 by former Google employee Charles Lee, Litecoin has seen dramatic ups and downs similar to those experienced by Bitcoin in its early years. Here are some things you will want to know if you’re considering adding Litecoin to your portfolio.
Similarities to Bitcoin
Like Bitcoin, Litecoin is a peer-to-peer cryptocurrency that operates on a decentralized global exchange network. Litecoins are generated by solving problems that increase in difficulty as blocks are produced. The value of Litecoin is set by an open, speculative market similar to Bitcoin and other commodities like gold or oil.
Litecoins are mined using computers to solve the math problems similarly to Bitcoin and are represented by a string of data that can be stored online or offline in a digital wallet. You can also purchase Litecoin on the open market through exchanges that accept payment in a variety of currencies, including gold.
Differences from Bitcoin
The principal differences between Litecoin and Bitcoin are in the mining process. Litecoin has a decreased generation time compared to Bitcoin, and it claims faster transaction times and improved storage efficiency than Bitcoin. There is a downside to the faster times, though.
Faster processing times increase the blockchain size requiring more memory and making devices for mining Litecoin more complicated and expensive than Bitcoin miners. However, this is a concern only if you plan to mine Litecoin as opposed to acquiring it through an exchange.
Litecoin has a production limit 84 million units, which is roughly four times as many currency units as Bitcoin. Its developers claim it is less vulnerable than Bitcoin to certain types of hacks, although that’s debatable, and both currencies are at least as safe as most bank deposits. They also claim that storage of Litecoin is more efficient than Bitcoin and that transactions take less time to process.
Several wallets are available for storing Litecoin on most operating systems, including mobile devices. As of early 2015, there are numerous exchanges that trade in Litecoin, although some restrict the trade to Bitcoin or a limited range of currencies.
You can learn more about Litecoin at Litecoin.org as well as numerous other sources on the internet.