What is Litecoin?
This guide aims to give an overview about what Litecoin is and how it is used. In particular, we cover its definition, the concept of the Litecoin wallet, Litecoin mining, its price, trading and how to keep up to date with the latest news.
So, what actually is Litecoin? Well, Litecoin is a digital currency (often these are also called crypto-currencies) which is not backed by any country’s central bank or government. Still, like other currencies, Litecoins can be traded for goods or services. You might have heard of other cryptocurrencies, such as Bitcoin and Ethereum. Litecoin is currently one of the three largest cryptocurrencies in circulation.
Transactions from one Litecoin to another are made by digitally exchanging anonymous, heavily encrypted hash codes across a peer-to-peer (P2P) network. This P2P network monitors and verifies the transfer of Litecoins between users.
What is a Litecoin Wallet?
Each user has their Litecoins stored in a digital wallet, which holds the address that the user sends and receives Litecoins from. The Litecoin wallet also includes a “private key” that only that user knows.
How Litecoin works
So, there is a limit to the number of Litecoins that can be created. The Litecoin network is designed to mathematically generate no more than 84 million Litecoins. Every 2.5 minutes the Litecoin network generates a “block” – a ledger entry of recent litecoin transactions throughout the world.
Litecoins can be spent in many different places. Technically, these transactions are initiated by a transfer request from a Litecoin address in the customer’s wallet to a Litecoin address in the vendor’s wallet.
What is Litecoin used for?
The answer to this is quite simple. Essentially, Litecoins can be spent wherever they are accepted as a payment method.
Like all cryptocurrencies, some countries do have concerns about the use of Litecoins. For instance, Litecoins can be used to anonymously transfer illicit funds or hide unreported income from the Internal Revenue Service (IRS). This was raised as a particular issue with Bitcoin as the currency has been linked with illegal activity in the past. As a result of this, Litecoin has made it its policy that transactions with “traditional” government-backed currencies, must be attached to someone’s identity.
What is Litecoin Mining?
You might be wondering where Litecoins actually come from. Think about it. In the case of physical money, a government decides when to print and distribute money. Yet, Litecoin doesn’t have a central government.
Instead, with Litecoin, miners use special software to solve math problems and are issued a certain number of Litecoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine. Initially, the incentive for mining Litecoin is that the first miner to successfully verify a block was rewarded with 50 Litecoins, yet this number will reduce over time.
What is Litecoin worth in USD and GBP?
The value of one Litecoin is always changing. At the time of writing, one Litecoin is worth £243.37 (pounds) or $323.90 (USD). There are various sites where you can find out the current price of Litecoin, one of which is CoinGecko.
What is the actual Price of Litecoin?
Actually calculating the price of Litecoin is pretty difficult. As a comparison, it’s worth reading Peter Cohan’s article in Forbes about the value of Bitcoin, called “Why bitcoin is worth 0, 20,000, 2M or infinity”. Peter Cohan argues that Bitcoin is worth “anywhere between $0 and infinity.” This is because people will pay for it as they are afraid of missing out and they feel that Bitcoin has the potential of making the world run more efficiently.
The compound annual growth of Litecoin between January 2014 (when it was $1.15) and December 2017 (when prices as high as $324.06 are mentioned) means that it is difficult to ignore Litecoin and its potential. Yet, in reality, this value regularly shift dramatically up and down.
Litecoin Price Chart
There are a number of websites to view Litecoin’s price changing over time. For example World Coin Index. An example of this across 2017 is below:
Litecoin Trading is the act of buying and selling Litecoins. There are a couple of ways to trade Litecoin:
- Buy the cryptocurrency itself and hope to sell it for a profit
- Speculate on its value without ever owning any coins (this is how spread betting and CFDs work)
Where can you read Litecoin news?
There are a number of sites where you can read the latest news about Litecoin. Here are a few sites that we feel give some useful insights about the crypto-currency: