In the growing digital era, the world of crypto (cryptocurrency) is also showing its growing fangs. The proof, there are many variations of tokens and coins that are starting to appear at this time. Since the emergence of bitcoin, now appears the name litecoin. Then, what is Litecoin?
In general, litecoin is a modification of bitcoin, but the transaction system is still the same as bitcoin. As for knowing more details, starting from the history or origin of the creation of Litecoin, the procedure for using Litecoin for transactions and most importantly, you will know the difference between Litecoin and Bitcoin. Check out the following review.
The History of Litecoin
What is Litecoin? Litecoin, shortened to LTC, is a modification of the bitcoin code created by a graduate of the Massachusetts Institute of Technology (MIT). It was Charlie Lee who created Litecoin as a digital currency in 2011.
After graduating from MIT, Charlie Lee had a career at Google and during his career there Charlie Lee began to make new breakthroughs by modifying a little bit of bitcoin into litecoin which currently exists in the crypto world.
As a result of these modifications, making LTC faster and easier to transact compared to bitcoin. This can be seen from the time in one transaction using LTC, it only takes about 2.5 minutes.
In contrast to bitcoin which takes up to 10 minutes, the number of circulation of litecoin is 4 times more than bitcoin, which is 84 million of bitcoin’s 21 million.
Besides being easy and fast, Litecoin also has a low cost. So many small-scale cryptocurrency miners are switching to using Litecoin.
So, there are many opportunities for cryptocurrency miners to get it and it turns out that the price increase in the cost to get LTC is not significant compared to the cost to get bitcoin.
Procedure of Using Litecoin to Trade and Invest
Litecoin itself is a currency designed to come from bitcoin. Therefore, how to make investments and transactions with Litecoin is almost the same as using Bitcoin.
In addition, whatever type of currency you have, you can exchange it into Litecoin. For example, if we have a rupiah currency, we need to convert it to dollars first. Like most types of cryptocurrencies, Litecoin can also be exchanged using US dollars. After being exchanged for US dollars, then we can exchange it to Litecoin.
Furthermore, what you need to know is that starting February 2021, conversions from US dollars to Litecoin will reach $201.32 per coin. That is, if you have rupiah currency, then you have to prepare approximately Rp. 2.8 million to be able to have this litecoin currency.
After we know the conversion, then we can process the transaction by mining Litecoin according to what we have in US dollars. Once you get it, you can save it in a special digital wallet in a place of choice that you really feel safe.
Before you go any further, you should know that litecoin conversion is expensive, but the potential loss is quite small. This is because the price tends to rise and quite rapidly.
Difference between Litecoin and Bitcoin
Previously, it was explained that the advantage of Litecoin is that it takes time to be able to own this currency. Thus, you do not have to bother to use a computer that has a super high capacity. You can already mine Litecoin using low specifications and you can get it.
This is because Litecoin activates Segreted Witness, making this coin time consuming at a lower price. Without a special platform, it makes it easy for owners to transact using the Swap Atom feature.
Therefore, we can briefly compare it with bitcoin, that:
- Litecoin’s market capitalization is still quite low, at $3 billion. Meanwhile, the market capitalization of bitcoin in circulation is currently $128 billion in 2020. Even so, the market capitalization of bitcoin in 2020 is smaller than in 2017, which could reach $326 billion.
- It was explained earlier that litecoin can be distributed to each miner of up to 84 million coins, compared to bitcoin which can only be distributed as much as 21 million coins. This is advantageous for Litecoi because people tend to make transactions per unit.
- The algorithm used in Litecoin is Scrypt which is different from the Bitcoin algorithm which uses SHA-256. How does the algorithm used by litecoin have an advantage over bitcoin’s algorithm?
Instead what happens is that using the Scrypt algorithm can have a big impact on the mining process. The big impact that occurs using Litecoin can be beneficial for miners, because the mining process can be simplified compared to the more complex SHA-256 algorithm. So that Litecoin investment can be easier to do.
As for the advantages or advantages possessed by litecoin, it does not necessarily mean that litecoin can be used easily. This convenience can lead to the weakness of Litecoin.
This allows the accumulation of litecoin stock. In the long term, if it doesn’t grow because the market has no interest, then the bubble may burst. This will lead to a drastic reduction in inflation.
The final word
That’s all information about what Litecoin is. So the point is that even though the price of Litecoin is quite cheap, the risk of investing in cryptocurrencies as a whole is quite large and there is also a lot of capital to prepare.
So you have to learn a lot and prepare for better financial conditions so you don’t experience losses in the future.
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Author: Muhammad Zaki Fajrul Haq
Follow me at @mzfajrulhaq (Instagram) or @ZakiFajrul (Twitter).