Litecoin is a decentralized peer-to-peer system, meaning that it is not controlled by any entity or government.
The payment system does not deal with physical currencies (fiat or coins), such as dollars or euros, and instead uses its unit of account, also called Litecoin (symbol: Ł or LTC). This is why you often see Litecoin classified as a virtual or digital currency.
What is Litecoin?
Litecoin (LTC) is one of the encrypted electronic digital currencies that does not exist on the ground. It is specific to dealing via the Internet, and it is like Bitcoin in terms of transactions and the blockchain protocols, which is the central system in mining Bitcoin.
The silver currency is called Litecoin because it appeared after the Bitcoin currency, which in turn got the name of the gold currency. Litecoin currency comes second after Bitcoin in the list of virtual currencies in terms of trading. Still, it differs slightly in its encryption and programming system, and the reason is This is because it is easy to obtain and mine.
The establishment of the Litecoin digital currency was announced in 2011, two years after the founding of Bitcoin, by engineer Charles Lee, who previously worked for Google.
Litecoin – It is one of the most famous electronic currencies that are traded in virtual reality. It appeared explicitly in 2011, and it is inspired by its mode of operation. The open-source encryption processes that it relies on its transactions from Bitcoin, so many see it as an extension of the currency Digital bitcoin. They consider Bitcoin to be gold and Litecoin to be silver.
Referred to as LTC or Ł, Litecoin is a peer-to-peer, open-source software project that comes under the MIT/X11 license.
Mining Litecoin: A viable option?
It is difficult to obtain the Litecoin digital currency, as it needs complex, open-source cryptographic processes. The main reason for this is to create an appropriate market value for it so that it does not suffer from inflation due to its excess supply.
It is noteworthy that Litecoin is not subject to any central authority. Specifically, it was released on October 7, 20011, by its developer, Charlie Lee, who was a former employee of Google, and it was issued on the GitHub web hosting service. It became operational and commercial on October 13, 2011.
On the other hand, although Litecoin is very similar to the Bitcoin digital currency in the way it is generated and its financial transactions are managed, it differs in the generation time of its one block, as it takes less time than Bitcoin when it comes to generating it. Litecoin only takes 2.5 minutes, and the available limit of Litecoin is four times greater than Bitcoin, depending on the hashing algorithm (Scrypt instead of SHA-256). Its mining is 84,000,000, while Bitcoin is only 21,000,000.
The two currencies also differ in their user interface, as Litecoin is different and somewhat modified from the standard interface in Bitcoin.
It is noteworthy that Litecoin broke the barrier of $1 billion in November 2013. In November 2017, its financial value amounted to $4,600,081,733, which made one unit of the Litecoin currency equal to $85.18. The same year, it witnessed a dramatic rise in its price value, with a total value of $20 billion, at $371 per unit of Litecoin, but it fell back again in front of the attack it faced from other cryptocurrencies.
How is Litecoin different from Bitcoin?
The creator of Litecoin explained that he sees digital currency as playing a significant role in payments. At the same time, Bitcoin is a store of more excellent value; he said in one of his interviews that: “Bitcoin will remain the gold standard because it has the largest, safest and most money-hunting network, but the cost of Litecoin will be lower.” This means it will be used more for payment, while Bitcoin will be used more for storage.
Unlike Bitcoin, Litecoin uses an algorithm (script) for mining, and this somewhat prevents individuals from building powerful custom computers specifically to mine the currency. Litecoin also has one of the fastest transaction times for digital currencies, clocking in at 2.5 minutes.
One of the main differences is that the total number of Litecoin coins is 84 million coins as opposed to 21 million Bitcoins.
Online wallets are always connected to the Internet and have many advantages, such as easy access to the Internet, but this is a significant drawback as they can be hacked.
There are three types of online wallets, the first of which is mobile phone wallets, which are through Android and Apple smartphone applications.
The second type is a software portfolio, which is a program that runs on computer systems such as Windows, Mac, or Linux.
And the third type is web wallet services on popular platforms such as the Coinbase platform and wallet.
Litecoin web wallets
Coinbase wallets and other web-based wallet services have advantages and disadvantages.
They can be accessed through a web browser on a computer or over the phone. These types of wallets are referred to as “hot wallets.”
This wallet type is constantly vulnerable to piracy because it works on a centralized system. So this means that Coinbase, for example, will have complete control over your wallet keys. And if Coinbase itself is hacked, scammers and hackers can access and steal your wallet keys from Coinbase databases.
- Easy to use and excellent for beginners
- Cryptocurrencies can be purchased using fiat currencies through the platform itself
- It facilitates the management of encrypted transfers within one account for more than one work
- You can sell your Litecoin to the site for fiat currencies
- It can be accessed from anywhere with an internet connection
- Vulnerable to online scams, attacks, and hacks
- You do not own the wallet physically or digitally, as the site owns it
- These sites themselves offer their services as a broker and not a cryptocurrency wallet service provider
Should you mine Litecoin?
Professional traders assume that trading Litecoin may be more profitable than mining it. For example, by using the MetaTrader 4 and MetaTrader 5 trading platforms, along with the MetaTrader Supreme Edition plugin, the costs are much lower compared to setting up ASIC hardware, which is expensive and far from a sure investment. There are many risks, including but not limited to:
- Increasing network difficulty: As mentioned earlier, the difficulty increases as more miners join the network, which leads to lower profitability. For this reason, it is important to make a realistic prediction about how much difficulty will develop shortly.
- Potential resale value is low: ASICs can mine Litecoin very efficiently, but that’s all they can do. It cannot be renewed for other purposes, so the resale value is deficient.
- Delayed delivery: You don’t want your devices to be delivered months after you purchased them. In particular, there have been many bad reviews on the internet about pre-order miners.
- Energy consumption: Do you want to pay less for electricity than you earn in Litecoin?
Litecoin analysis: What are the predictions for Litecoin for 2023?
Yes, it is safe to trade like Bitcoin, or any other commodity, for that matter. In fact, Litecoin trading has skyrocketed in popularity in recent years.
What is the right strategy for trading Litecoin?
There are three well-known ways to access the financial markets analytically:
Technical analysis provides excellent guidance on analyzing Litecoin and finding trading tools using price action, candlestick patterns, and technical indicators. Some traders use candlesticks only to make their decisions, while others focus entirely on indicators and tools. It is also possible to use a combination of both price action and candlesticks, along with indicators and utilities.
Fundamental analysis or news trading are also methods used to read the markets.
These traders review economic data for each company, country or bloc or, in the case of Litecoin, cryptocurrency news and assess the future potential of the currency.
Wave analysis is an alternative method that some traders choose to use to help them understand the structure of the financial markets. Wave analysis is based on the Elliott Wave theory, which explains how trader and market psychology influences market behavior and price patterns.
All three methods are equally valid; traders can combine two or three of them to get a broad approach. It really depends on each trader’s preference, and it always makes sense to experiment with several methods to see what works for your trading style.