What is Litecoin? How does Litecoin work? How do you store it, and can you pay with it? We satisfy your curiosity about one of the world’s most popular cryptocurrencies.
Litecoin is a cryptocurrency that makes peer-to-peer transfers instant and at almost no cost. It is largely inspired by Bitcoin and both cryptocurrencies have nearly identical technical aspects. According to Litecoin.org, Litecoin is meant to be a “medium of commerce complementary to Bitcoin”.
A popular analogy: If bitcoin was gold, litecoin would be silver.
Charlie Lee, a former employee of Google, created Litecoin in October 2011. He worked using the core code of Bitcoin, making his changes to the code so that it would create a new cryptocurrency that he felt would work best for mainstream, large-scale adoption.
Litecoin was created to complement Bitcoin, solving some of the issues with Bitcoin, such as long transaction times and higher fees.
One of Charlie Lee’s main goals for Litecoin was to increase the number of transactions that could be confirmed. While Bitcoin takes an average of 10 minutes for block confirmation, Litecoin takes 2.5 minutes. This means that Litecoin is approximately four times faster than Bitcoin in processing transactions.
Litecoin also has lower fees than what is charged by credit card companies and banks for international transfers, for example: A person in Germany can send a payment to someone else in China in seconds. Both parties will receive non-editable proof of the transaction, stored on the blockchain.
Litecoin was created to enable quick and cheap payments, that take as long as sending an email.
Nobody owns Litecoin. Litecoin is an open-source, international payment network that is fully decentralized without any central authorities or governments. Yet, at the same time, anybody can participate in owning and using litecoin.
There will only be a maximum supply of 84,000,000 LTC. Unlike the euro or any other existing fiat currencies, it is not possible to ‘print out’ any additional litecoin beyond the 84 million supply limit.
The most common way of buying litecoin is on exchanges, most of which operate online. Exchanges are platforms that allow you to trade an asset (such as euros) for litecoin, and vice versa.
When you buy litecoin, always make sure to check that you are buying from a trusted and verified exchange. You can verify their legitimacy by checking for official business licenses and looking up user app reviews.
You would store litecoin in a crypto wallet, which is essentially an interface that lets you send, receive, and store amounts of litecoin.
There are various types of wallets, most commonly known as hot wallets and cold wallets. It is recommended that you store litecoin in both types of wallets, depending on the situation.
For convenience and ease of use, you can store some litecoin in a hot wallet, so that you can access it easily when needed.
Note that your cryptocurrency balance on exchanges is also stored in hot wallets, and according to best practices should not be stored there long-term.
A cold wallet is the safest way to store your litecoin as you are the only person who has full control of the wallet. If you own a large amount of litecoin, we recommend that you store most of it in a cold wallet.
A crypto card is the simplest way to pay for goods and services using litecoin. This is because it typically uses an existing payment network (such as Visa or Mastercard) to process your payment, with the crypto card company acting as the middleman and helping you to convert your cryptocurrency to cash.
The TenX Visa Card, for example, makes it possible for you to spend litecoin at more than 54 million Visa merchant locations in over 200 countries.
You can also pay individuals by sending the amount of litecoin directly to their crypto wallet.
To do this, you will need to get their litecoin wallet address. As the payment is irreversible, make sure to check that:
Litecoin as a technology is extremely secure, as evidenced from the last 9 years of history.
In fact, most of the security issues are caused by third-party service providers such as centralized exchanges, wallet developers, or the user’s personal mismanagement of their private key.
Here are some precautions that you should take to keep litecoin safe: