Litecoin (LTC) is a peer-to-peer cryptocurrency and open-source software that was released in October 2011 under the MIT/X11 license. It was an early Bitcoin spin-off, otherwise known as an altcoin (alternative cryptocurrency coin).
Litecoin to Rand of Quick Overview
- ☑️What is a peer-to-peer cryptocurrency?
- ☑️What is open-source software?
- ☑️What is the MIT/X11 license?
- ☑️What is the difference between Litecoin and Bitcoin?
- ☑️Why is Litecoin a hardfork Bitcoin?
- ☑️How popular is Litecoin?
- ☑️Is Litecoin a good investment?
- ☑️Litecoin versus Bitcoin Cash
- ☑️Bitcoin or Litecoin: which is a better investment?
- ☑️How to buy Litecoin in South Africa
Litecoin is a decentralized virtual currency that is created and transferred using an open-source cryptographic protocol.
What is a peer-to-peer cryptocurrency?
Peer-to-peer (P2P) computing or networking divides tasks or workloads between peers using distributed application architecture. This is a system where components are located on a computer network system which allows communication and the coordination of actions to pass from one member of the network to another member.
The peer-to-peer network is comprised of nodes (each peer) and each node processes actions independently without working through a central server or host. Peers both supply and consume resources while collaborating on the peer-to-peer network which creates what is known as a virtual community.
What is open-source software?
Open-source software (OSS) is a form of computer software where source code is released under a license that is copywritten by the license holder. The license gives users the right to study, change, and distribute the software to anyone and for any purpose.
It has created a culture of community sharing which differs from the early days of computing. Programmers have for decades collaborated on software development but the open-source license system has given rise to the commercialisation of software.
Instead of feeling threatened by freely distributing their software and allowing universal access to the application’s source code, the new-age commercial software vendors are harnessing the power of collaboration. The free software movement means anyone can create modifications, port it to new operating systems and instruction set architectures, share it, and market it.
What is the MIT/X11 license?
The MIT license originated at the Massachusetts Institute of Technology (MIT) in the late 1980s. It is a permission-driven license that grants users free access to software. MIT puts very limited restrictions on the reuse of the MIT license.
The MIT license can be re-licensed under other licenses and also permits reuse within proprietary software with conditions. It’s compatible with many copyleft licenses, such as the GNU General Public License (GPL).
What is the difference between Litecoin and Bitcoin?
Litecoin is essentially an off-shoot of Bitcoin. It was released by Charlie Lee, who had previously been employed by Google. It’s known in cryptocurrency circles as a hard fork of Bitcoin.
The main difference between Litecoin and Bitcoin is that Litecoin’s block generation time is significantly shorter than Bitcoin’s (down to 2.5 minutes). It has a different hashing algorithm (script instead of SHA-256) and a slightly modified graphical user interface (GUI).
The revolutionary technology that Charlie Lee used to hard-fork from Bitcoin has created a digital coin that is more useful as an affordable payment mechanism. Lee’s objective was to put cryptocurrency into the hands of the average man on the street and create a coin that could be used daily.
Block generation time
The Litecoin network can process a block in the blockchain every 2.5 minutes. This is significantly faster than Bitcoin, where a block is typically processed in about 10 minutes.
The benefit of this fast processing time is it allows merchants to confirm Litecoin transactions much faster than they can confirm Bitcoin transactions. This is why Litecoin has gained a lot of ground as a ‘transaction coin’ where Bitcoin is still largely viewed as an ‘investment coin.’
Scrypt algorithm
Litecoin uses Scrypt in its proof-of-work algorithm, while Bitcoin uses SHA-256. Scrypt is a sequential memory-hard function and a password-based derivation function.
The hard-form memory function requires a large amount of memory (thus energy) and was designed specifically to make it costly to perform large-scale hardware attacks.
Bitcoin SHA-256 versus Litecoin Scrypt
Bitcoin uses the SHA-256 algorithm to create hashes. The hashes represent the data held in blocks on the blockchain. SHA-256 is multi-faceted and more difficult to mine because the algorithm requires a very high hash rate.
On the plus side, SHA-256 makes the network system highly secure and accurate. On the downside, the processing time is slow and it can take up to 10 minutes to generate each block. This puts Bitcoin at a disadvantage where the coin is not suitable for day-to-day commercial transactions.
The Scrypt algorithm takes full advantage of Bitcoin’s slow processing weakness. It’s a less complex algorithm and does not require such a high hash rate as SHA-256.
📌Feature | 🪙Bitcoin (BTC) | 🪙Litecoin (LTC) |
💰 Market Cap | High | Lower |
⛏ Mining Algorithm | SHA-256 | Scrypt |
🕒 Block Time | 10 minutes | 2.5 minutes |
🔢 Total Supply | 21 million | 84 million |
🌍 Popularity | Very Popular | Less Popular |
⚡ Transaction Speed | Slower | Faster |
🔧 Network Stability | Highly Secure | Secure |
🚦 Transaction Fees | Higher | Lower |
🎉 Launch Year | 2009 | 2011 |
👥 Developer Activity | Active | Active |
Why is Litecoin a hardfork Bitcoin?
Are you wondering what a hard fork is? A hard fork is when a new blockchain takes the original code from a previous blockchain but improves the technology. Charlie Lee, who created Litecoin, had one goal in mind: to make the original Bitcoin blockchain quicker and easier to use.
Mining Litecoin
Mining Bitcoin has become very difficult and is only done by individuals who have their expensive hardware. You need a supercomputer with extra power to solve difficult mathematical problems to generate Bitcoin. This also means that you need a lot of expensive electricity.
To mine Litecoin, you only need a graphic processing unit (GPU), which is much cheaper to purchase and uses less energy. This means that anyone can mine Litecoin.
Transaction speed and fees
The average transaction speed for Litecoin is about 2.5 minutes. A Bitcoin transaction takes about 10 minutes. GPUs speed up the network and this, in turn, reduces the average cost of sending a Litecoin transaction.
Threat of attack
Charlie Lee addressed the problem of flood attacks when he created Litecoin. He did this by adopting Scrypt as its proof-of-work algorithm. A flood attack is where hundreds of thousands of spam transactions are sent to the network. It’s similar to a virus where dodgy people try to destroy the system.
How popular is Litecoin?
Bitcoin, Ethereum, and Litecoin are the most popular cryptocurrencies with Ripple coming in at fourth place purely on market capitalization. Bitcoin remains by far the most popular choice but Ethereum and Litecoin have gained ground more recently.
Litecoin was launched in October 2011, and in November 2013, the digital coin experienced massive growth in its aggregate value. This included a 100% leap within 24 hours.
Litecoin was predicted to trade close at USD 250 by 31 December 2019. The coin is predicted to range between USD 1,000 and USD 1200 in five years.
Three factors make Litecoin attractive to investors:
- Litecoin uses Scrypt to mine units. This software algorithm eliminates the need for powerful custom computers designed specifically to mine Litecoin.
- Litecoin has one of the fastest transaction times of the virtual currencies which makes it far more attractive as a payment currency. Litecoin’s processing time clocks in at 2.5 minutes, compared to 10 minutes for Bitcoin.
- Litecoin is still the cheapest of the three major cryptocurrencies.
Is Litecoin a good investment?
Buying any cryptocurrency comes with its risks, and the different coins spike and crash so often it’s hard to know which one is best or if any digital currency can be trusted. As an example, in 2017, Litecoin increased its value by more than 5000% in just 12 months.
One of the main advantages of investing in Litecoin is it is so much easier to buy using fiat money than Bitcoin and Ether. You can use your debit or credit card, do a bank transfer, or use PayPal. You can buy Litecoin with any fiat currency such as the US Dollar, Euro, Pound Sterling, and even Rands.
This gives Litecoin an advantage over Bitcoin and Ether, where you have to exchange one cryptocurrency for another.
That being said, it’s not fair to compare Bitcoin and Ethereum to Litecoin. Bitcoin is viewed as the ‘gold currency’ of the virtual money world and speculative investors typically hang onto their Bitcoin for a long time. Litecoin is viewed as the ‘silver currency’ where investors typically favor it for daily transactions. Litecoin’s advantages over Bitcoin currently make it a great alternative for payment transactions.
Litecoin versus Bitcoin Cash
Bitcoin has a long way to go and many obstacles to overcome before it becomes an acceptable means of payment for everyday commercial products and services. Bitcoin’s scalability is an issue. The transaction times are too slow for Bitcoin to be used as a method of payment for daily transactions. Bitcoin can only manage about 7 transactions per second, whereas Litecoin can do up to 56 transactions per second.
Enter Bitcoin Cash.
Bitcoin Cash was created to overcome weaknesses that Litecoin has capitalized on, such as slow processing time, higher transaction fees, expensive processing protocol, and scalability.
Bitcoin Cash increased the block size limit of Bitcoin from 1MB to 8 MB. This means the transaction volume of Bitcoin is between 4 to 8 times that of Bitcoin. The fight for the leading position for electronic cash is now between Litecoin and Bitcoin Cash.
Bitcoin or Litecoin: which is a better investment?
Altcoin (alternative coins) is a term that started doing the rounds when new cryptocurrencies were launched on the market. Bitcoin was regarded as the ‘holy grail’ of cryptocurrencies and anything else was a ‘copycat’.
This broad generalization is fast becoming old news, and Altcoins are giving Bitcoin a run for its money. Here’s why it’s a good idea to invest in a combination of Bitcoin and Altcoins such as Litecoin.
Litecoin has intrinsic value
The value of a cryptocurrency is based on two things:
- intrinsic value – the value the coin gains from its credibility and usefulness
- speculative value – the value the coin gains from speculative traders who expect the price to fluctuate shortly
Bitcoin up until now is priced purely on its speculative value which means it is often overvalued. Litecoin, on the other hand, is gaining popularity because of its intrinsic value (a useful coin for daily payments).
Due to the highly speculative nature of Bitcoin, the minute the market criticizes Bitcoin or cryptocurrencies in general receive negative press; investors get jittery and sell their Bitcoin. This is what causes the extreme crashes and spikes.
Litecoin has secured the top spot as a trustworthy coin for daily transactions and people who buy Litecoin want the digital currency because of what it can be used for rather than what it might be worth in the future. This makes Litecoin a more stable alternative to Bitcoin which is more volatile.
Bitcoin is ‘expensive’ and Altcoins are ‘cheaper’
The price of Bitcoin is overinflated at the moment, mainly due to pure speculation. This makes it difficult for your average man in the street to make a meaningful investment in Bitcoin because the cryptocurrency is expensive.
Altcoins such as Litecoin trade at very low prices compared to Bitcoin. It’s also easier to buy Litecoin with fiat money, and the transaction fees are lower.
The barrier to entry into cryptocurrencies is lower if you enter through the Altcoin door, but don’t be mistaken… Litecoin is not the ‘poor man’s’ cryptocurrency. It has great value as a payment transaction coin, and if you invest now in Litecoin, you’ll benefit from its upside potential.
Litecoin is more than just a digital coin
As mentioned a few times in this article, Litecoin was designed by Charlie Lee to meet the market’s need for a secure payment mechanism for day-to-day transactions. Litecoin and a few other newbie cryptocurrencies adopted some impressive technology when they took a hard fork from Bitcoin and it’s changing the way the world views virtual money.
Litecoin has new competition in the form of Bitcoin Cash and might battle to hold onto its position on the leaderboard as the best digital payment method. Litecoin and Bitcoin Cash both provide fast peer-to-peer transactions globally and are gaining traction as a popular way to transfer money. However, Litecoin transactions are still a lot faster than Bitcoin Cash.
Litecoin is easier and cheaper to mine
If cryptocurrency mining interests you, Litecoin is an easier and cheaper alternative to Bitcoin.
Litecoin uses the Scrypt algorithm which requires less computer processing power and the transaction speed is faster. Bitcoin uses the SHA-256 hashing algorithm which requires expensive mining hardware, a lot of processing power (electricity) and the mining process is more complex.
How to buy Litecoin in South Africa
You can buy Litecoin in South Africa in 4 easy steps:
Step 1: Get Started
Get a Litecoin wallet by clicking on the Get Started button.
Step 2: Continue
Click on the Continue button to sign up.
Step 3: Sign up with an email
Enter your email address and press continue.
Step 4: Enter the email code
Enter your PIN code and send it to the personal email you signed up with.
Conclusion
The conversion of Litecoin (LTC) to Rand (ZAR) aims to provide South African traders in Cryptocurrency with their currency.
Litecoin, being a faster and cheaper version of Bitcoin, allows for efficient transactions, which, however, fluctuates depending on the Bitcoin market.
This pairing enables users to monitor and trade Litecoin for the South African Rand with great ease, making it possible for them to seek other opportunities for investment in the digital currency.
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Frequently Asked Questions
What is the price of Litecoin in South Africa?
View the live Litecoin price in ZAR here.
Is Litecoin easier to mine than Bitcoin?
Yes, Litecoin mining is easier and cheaper than mining Bitcoin.
Is there a future with Litecoin?
Yes, Litecoin promises to be a long-term investment.
Is it good to invest in Litecoin now?
Yes, now would be an excellent time to purchase LTC before the markets recover since the cryptocurrency has shown significant growth potential.
Can Litecoin survive?
Experts believe that this cryptocurrency is still strong.
Why is Litecoin so special?
Because of its faster transaction times, unique privacy features, and passionate community.
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