Litecoin is a digital currency created in 2011 by Charles Lee, with the goal of being a "silver coin" to Bitcoin's "gold coin." It is the oldest and most popular "fork" (refined version) of Bitcoin, and focuses on being a fast and low-cost means of payment.
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Detailed analysis
1. Basics and Identity (Main Objective)
· Objective: It was created to improve specific aspects of Bitcoin, not to compete with it as a "store of value." Its primary focus is daily transactions.
Unofficial motto: "The silver coin to the gold coin (Bitcoin)".
Founder: Charlie Lee, a former Google and Coinbase engineer. Having a well-known and accessible founder adds credibility, but he also drew criticism after selling all of his LTC holdings at the height of the 2017 market.
2. Technical aspects (how does it work?)
Litecoin is very similar to Bitcoin, but with some key differences:
· Mining algorithm (Hashing Algorithm):
Bitcoin: Uses SHA-256.
Litecoin: Uses Scrypt.
Difference: Scrypt was initially designed to be ASIC-resistant (ASIC-resistant) to encourage decentralized mining using CPUs and GPUs. However, over time, ASICs have also been developed for the Scrypt algorithm, so this difference is no longer as significant as it once was.
Block Time:
Bitcoin: approximately 10 minutes.
Litecoin: approximately 2.5 minutes.
Advantage: Transaction confirmation speeds are four times faster, meaning Litecoin transfers settle faster.
Total Supply:
Bitcoin: 21 million coins.
Litecoin: 84 million coins.
Advantage: A larger supply means a lower individual price per coin, making it psychologically more suitable for small transactions.
Consensus Mechanism: Proof-of-Work, such as Bitcoin.
3. Advantages (strengths)
1. Speed: Transactions are much faster than Bitcoin.
2. Cost: Transaction fees are very low compared to Bitcoin and other currencies.
3. Liquidity and Acceptance: One of the oldest currencies and widely accepted on exchanges and service providers, it has high liquidity.
4. Reliability and Security: A strong and secure network that has never been hacked since its launch.
5. Name and Brand: A well-known and trusted name in the cryptocurrency industry.
