Although it may not make headlines as frequently as Bitcoin, Litecoin (LTC) is nevertheless the second-oldest cryptocurrency and one of the most popular cryptocurrencies worldwide.

What is Litecoin?

Litecoin is considered by many to be the first ‘altcoin’ in the crypto market. Like Bitcoin, Litecoin is a blockchain-based peer-to-peer (P2P) cryptocurrency that focuses on digital payments. Formed in 2011, Litecoin looked to address some perceived shortcomings in Bitcoin by altering the Bitcoin code to finalise blocks faster - hence the term ‘lite’. 

Litecoin is a key competitor in the digital payment space, boasting a fast transaction speed and near-zero cost payments to anyone in the world. While we all know Bitcoin to be the ‘digital gold’, Litecoin has been labelled the ‘digital silver’ of the crypto industry -  with substantial industry support, trade volume, and liquidity.

Litecoin’s native crypto asset, LTC, is used for transaction fees and sending value across the internet.

How does Litecoin work?

A modification of the Bitcoin code, Litecoin has many similar features. As a result, you should be able to understand Litecoin if you have a basic understanding of how Bitcoin works. 

Similarly to Bitcoin, Litecoin utilises a proof-of-work consensus mechanism, allowing users to verify blocks in exchange for the native token. Although the consensus mechanism is the same, the algorithms used to validate blocks are entirely different. Litecoin uses the Scrypt consensus algorithm, while Bitcoin uses the Secure Hash Algorithm (SHA).

In addition to its algorithm, Litecoin differs from Bitcoin in two significant ways: its total supply and its block production rate. Aside from increasing the rate at which blocks are solved, Litecoin also increased its total token supply to 84 million. Since Litecoin can clear more transactions per second than Bitcoin, LTC may be more suitable as a day-to-day cryptocurrency.

What makes Litecoin unique?

1. Digital scarcity

Litecoin has a capped supply of 84 million coins, meaning that only a set number of coins will ever be mined into circulation. With this limited supply, Litecoin adds value through scarcity. Therefore, the term "digital silver" is frequently used to describe Litecoin in the cryptocurrency community.

2. High transaction speed and low transaction costs

Litecoin reduced its block time confirmation to 2.5 minutes compared to Bitcoin’s 10 minutes. This reduction means Litecoin processes transactions 4x faster than Bitcoin. LTC transaction fees are significantly cheaper than BTC transaction fees. Litecoin currently has an almost zero average transaction fee of around $0.0070. The faster block times and lower costs make Litecoin a more viable option for everyday use.

3. Growing user base

The total number of Litecoin transactions now exceeds 126 million. More notably, Litecoin’s transaction count has increased by more than 20 million in 2022. Its rapid growth is due to the fact that users have realised Litecoin's power as a medium of exchange.

4. 100% uptime

Litecoin has never gone down in its history. Running for ten years with 100% uptime, Litecoin is now one of the longest-running crypto asset networks in the world.

Where can you buy Litecoin?

Cape Town-based crypto investment platform Altify, backed by JSE-listed Sabvest, is adding Litecoin to its cryptocurrency product offering on Thursday, the 3rd of November. Adding to that, Altify will be running a promotion where customers can buy Litecoin without having to pay transaction fees up to the 10th of November 2022. That’s right, Fee-free Litecoin on Altify!

Altify brings simplicity, trust and excellent customer service to investing in cryptocurrencies. Its easy-to-use online platform enables you to securely own the world’s top cryptocurrencies in just a few clicks.