Litecoin has risen to astronomical prices in the last few months. You used to be able to buy a Litecoin for $4-5, but those days are long gone as one Litecoin costs $27.60 to date. I am going to go through the basics of Litecoin, as well as why it rose in price so much lately. At a marketcap of $1.4B, I am going to explain why Litecoin will become a force to be reckoned with.

What is Litecoin and how is it different?

Litecoin was one of the first Altcoins that came into use. It was invented in 2011 and was heavily inspired by the Bitcoin open source code. Besides a few tweaks here and there, Litecoin is very similar to Bitcoin. Litecoin has a decreased block time of 2.5 minutes compared to the 10 minutes Bitcoin takes. It also uses a hashing algorithm called scrypt. Scrypt is similar to the SHA-256 algorithm used by Bitcoin, except for the fact that it lowers the memory needed to mine Litecoin. This is because as mining technology became more efficient over time and block difficulty increased, it became very expensive to start a mining operation. A modern ASIC machine these days will cost you close to $2,000, and you might not even make a profit on it if electricity is moderately expensive. Scrypt aims to modify the algorithm by not giving an advantage to ASIC miners over CPU miners. This makes it much more cost efficient to mine Litecoin rather than Bitcoin. Now I am going to get into what Litecoin aims to add in the future and why people are so bullish about this coin.

Lightning Network and Segwit

Litecoin aims to be the fastest and most efficient coins by maximizing two different soft forks that were introduced to Bitcoin but not put into effect yet. One of them is the controversial Segwit, which essentially moves things around in a block to process more payments at once. For a much more detailed explanation, you can check out my article called “What is Segwit” in order to learn more. Segwit has already been voted into Litecoin, this is what caused the huge jump in price, as people see a future for the coin in terms of scalability, unlike Bitcoin which has not yet worked out a long term solution to its payment problems. The second addition that people are hoping to introduce to Litecoin is called the Lightning Netowork. Lightning Network aims to make transactions instant by enforcing them with a smart contract. Transactions will consist of a contract between both parties called a payment channel. Both parties put an entry on the public ledger, and as soon as both parties put up an entry, the transaction is made. The network also uses a special algorithm that enforces transactions even if nodes are not trusted.This means that transactions can be made off of the block chain, and people can make payments much easier. According to the Lightning Networks official website “This is similar to how one makes many legal contracts with others, but one does not go to court every time a contract is made.”. When one party isn’t cooperating, a transaction will not go through since the Blockchain will enforce all transactions. This feature has not been introduced to Litecoin. Segwit serves as a temporary template for the Lightning Network and for faster transactions as a whole.

Where can I buy Litecoin?

Litecoin can be bought on many different popular exchanges including Poloniex, Kraken, Bitfinex and has recently been added to Coinbase.

Will Litecoin be valuable in the future?

Since payments will be able to be processed quicker I think Litecoin will become a big force in the crypto-world in the future. I am optimistic about Litecoin long-term and I think people will use it to make short and low cost transactions rather than Bitcoin which I think will be used as a holding investment similar to gold. If you liked my article, you can donate to my Bitcoin wallet below. If you want to support my blog but are broke like me you can click on the affiliate links below to get us both free Bitcoin and Dogecoin. Donate to keep frequent posts coming!

FreeDogecoin: http://freedoge.co.in/?r=763804

FreeBitcoin https://freebitco.in/?r=4538456 (highlight link and click “go to”)

Bitcoin Wallet Address : 17XMu3B2WSxDq1EdG9abbtxqL85rxfr1GF

NEM Wallet Address: NBVPMK-IGOJZH-DUZKUB-J5Q72R-E4SW-2O-CDTMTC-FWON

ETH Wallet Address: 0x25Feaf4c1533e99BF8795B123AA684d6afB44A54

Sources

http://coinmarketcap.com/currencies/litecoin/

http://lightning.community/release/software/lnd/lightning/2017/05/03/litening/

https://lightning.network/