Litecoin (LTC) is one of the oldest existing cryptocurrencies, and also one of the most valuable. For much of its existence it has been seen as the silver to Bitcoin’s gold, but in the past couple of years it has lost its place as the second most popular cryptocurrency, with innovative competitors like Ethereum, Ripple, Cardano and Steller entering the market to claim their piece of the action.
In this guide, we’ll explore what differentiates Litecoin from Bitcoin and other cryptocurrency technology, along with these topics:
Litecoin was one of the first “forks” of the first cryptocurrency Bitcoin. In other words, Litecoin took Bitcoin’s free and open source code base and tweaked it slightly. Founded by former Google employee Charlie Lee in October, 2011, and developed and maintained by the Litecoin Association, the cryptocurrency was meant to improve on Bitcoin in a few key ways. Goals included increasing transaction speeds, decreasing the potential of spam transactions harming the network, and making it easier for more people to participate in the network.
As you might guess, Litecoin is nearly identical to Bitcoin in that it operates through a blockchain, which is simply a sequence of transaction records making up a decentralized ledger. This is in contrast to how traditional currency transactions are tracked through centralized bank ledgers. As with Bitcoin and most other cryptocurrencies, Litecoin’s blockchain is distributed across a peer-to-peer network made up of computers called “nodes” that run its software.
These nodes securely store a record of all transactions that happen on the network in near real-time, grouping them together into “blocks” that make up the blockchain. Litecoin adds a new block to the blockchain every 2.5 minutes containing a record of all transactions that happened after the previous block. The blockchain is extremely difficult to modify since it would have to be modified on every single node in the network. This is one of the major strengths of cryptocurrency as compared to traditional banking.
The process of collecting newly broadcast transactions together into blocks and adding them to the blockchain is called “mining” because the people doing said activities are rewarded with litecoins. A given “node” or computer in the network will only be rewarded when they successfully add a block by creating a valid “hash”.
A hash is simply a long string of numbers that serves as proof that a block contains valid, unmodified data before it’s added to the blockchain. All hashing functions are one-way: there is no way to derive the original data from them, as they can only be used to validate that the data that generated the hash has not been altered.
The fact that all of these blocks are linked together means that to alter one block, one must alter all previous blocks in the chain, which makes altering the blockchain pretty much impossible.
How to Mine Litecoin
Mining litecoins isn’t as easy as it used to be, but because of the aforementioned modifications to Bitcoin’s code, it’s still much easier than mining Bitcoin and many other cryptocurrencies. In fact, old Bitcoin mining rigs that are no longer good enough to keep up with the increasing difficulty of Bitcoin mining can often be repurposed to mine litecoins, especially if decent graphics cards are added. Newer dedicated “ASIC Scrypt Miners” are also an option. These are computers specially designed to mine litecoins and other cryptocurrencies based on the same technology (more on this later).
Before beginning to mine, however, you should first do up a budget based on the current difficulty of mining and estimated electricity usage, and then factor in your electricity costs. You may find that it isn’t profitable to start a mining operation unless you get enough equipment together that is somewhat energy efficient and can somehow effectively dissipate the extra heat that is generated by your mining rigs (mining is often more profitable in cold climates, for example, where the heat generated from mining rigs is actually an asset).
Once your equipment is set up, the most profitable way to mine is usually to join a mining pool, where the hashing power of your computer joins a network of other computers that together have a much higher chance of successfully generating a valid hash. Mined coins are then distributed across the network based on percentage of computer power contributed.
Besides the hardware, you’ll also need to set up mining software on your mining rigs, although many purpose-built rigs will come with software pre-installed. If you don’t have software yet, consider setting up Cgminer, CUDAminer or Cpuminer. These are all good options for mining litecoins.
The final thing you need for mining is a litecoin wallet, which we’ll go into more below. If you’re looking to get your litecoins right away, however, purchasing them is far more straightforward.
- Coinbase: This simple to use, USA-based exchange is one of the oldest and most trusted. Coinbase offers Litecoin, Bitcoin, Ethereum and Bitcoin Cash for sale using credit and debit cards. In the United States, money can be deposited using bank transfers as well. The website is very user friendly, and fees are reasonable.
- GDAX: This exchange is owned by Coinbase, but has a more advanced interface than Coinbase. Trading fees are low at 0.25%, and money can be transferred in via ACH bank transfers and wire transfers.
- Kraken: Another large USA-based exchange, Kraken allows you to buy Litecoin and other cryptocurrencies with USD, GBP, JPY, EUR and CAD via wire transfers.
Although it’s possible to keep your coins in your account on an online exchange, for security reasons it’s best to transfer them to an outside wallet. Here are your basic choices:
- Software wallets are programs on your computer or mobile device that allow you to send and receive Litecoins and to see the history of your transactions. If using a software wallet, it might be a good idea to use a wallet such as Jaxx that supports multiple currencies, since you may want to expand into other cryptocurrencies at some point. Jaxx has the added benefit of allowing you to exchange Litecoins for other cryptocurrencies directly in the wallet. Other good software wallets include Electrum-LTC and Exodus.io.
- Hardware wallets, meanwhile, are physical devices, usually a USB key, that store your private key offline in “cold storage”. Make sure to purchase them directly from the manufacturer to avoid fake or modified hardware wallets that can be used to steal your funds. Hardware wallets generally offer the best security while still remaining very user-friendly. Learn more in our Ledger Nano S, Trezor, and KeepKey reviews.
- Online wallets are held on the servers of a company. Although you can access these wallets from anywhere, the disadvantage is that your private keys are stored on a computer that isn’t your own. This means you not only have to trust that the company won’t steal your coins, but you must also trust that their security is good enough to prevent someone else from stealing them.
- Paper wallets are another very secure form of wallet. They are really just a print out of the public address and associated private key of your litecoins, which you can then use to unlock/access them via digital wallets that connect to the Litecoin network.
Check out our full list of the best Litecoin wallets here.
Remember, litecoins don’t actually physically exist. They are merely records of transactions involving the sending of values between Litecoin addresses.
Litecoin transactions work the same way as most cryptocurrencies: they are simply digital messages, similar to email, which are combined with other transactions into blocks and added to the chain. All transactions that happen on the network are public and can be viewed on the public blockchain ledger.
To send litecoins, you need the address you are sending to, your private key (which should remain hidden to everyone but you), along with the amount of litecoins you wish to send. Wallets that “contain” your litecoins really contain the private keys behind the scenes without you needing to worry about them (unless you want to). Private keys should remain private. Never share them with anyone unless you want them to have access to your coins.
An example transaction would go something like this: the sender’s wallet uses a private key to sign a transaction message with the transaction details (the input address, amount, and the output address). This message is broadcast to the Litecoin network, where the lucky miner verifies that the keys have access to the requested coins, and the transaction is then grouped with other transactions into a block via the previously described mining and hashing process and added to the public blockchain.
- Decentralized: Litecoin’s hashing algorithm, called Scrypt, differs from Bitcoin’s SHA-256 hashing algorithm in that it not only requires computer processing power (CPU power) to run its hashing calculations, but also uses computer memory, making it easier for non-specialized computers without as much processing power to mine them. This means that Litecoin can potentially be less centralized than Bitcoin, since less money and resources are needed to take part in the network.
- Faster than Bitcoin: Additionally, the Litecoin network is not nearly as bogged down with transactions as the Bitcoin network at the moment, so Litecoin is a great choice for sending money between exchanges for faster and cheaper transactions. Further, since blocks are created every 2.5 minutes, this means Litecoin is better for time-sensitive purchases than Bitcoin with its 10 minute block additions. Even if Litecoin was as popular as Bitcoin, transactions would still happen much faster. Because of speed and fee advantages, Litecoins are a great choice for converting fiat currencies into cryptocurrencies. If you’re interested in purchasing a specific cryptocurrency token/coin on a specific exchange, simply buy litecoins, send them to that exchange, exchange it for bitcoins or another cryptocurrency that has a trading pair with the token you want to purchase, and voila!
- Availability: Another potential advantage of litecoins is that there will be four times more of them than bitcoins once all the coins are mined (cryptocurrencies generally have caps on the amount of coins that will ever come into existence). This means they could theoretically be more widespread and easier to acquire. However, since both cryptos are infinitely divisible, it’s quite easy to have a fraction of either, which makes the total cap somewhat arbitrary.
- Spam Resistant: A fix was implemented in Litecoin that prevents many small “spam” transactions from slowing the network. This fix simply charges a sender a fee for every tiny transaction a sender creates, making it cost a lot more to spam the Litecoin network with tiny transactions than it would cost to spam the Bitcoin network, for example.
- Superiority of other Cryptocurrencies: Over the past couple of years, Litecoin has been losing ground to and being surpassed by other cryptocurrencies in terms of value in relation to fiat currency. This is likely because these other cryptocurrencies offer more utility beyond simply acting as a store or exchange of value. Ethereum, for example, offers a decentralized platform allowing the creation of things like digital contracts (smart contracts), decentralized applications (dapps), and more.
- Lack of Scaling: Cryptocurrencies such as Steller, Ripple, and Steem offer increased scaling capacity for potentially wider use. For example, Ripple and Steller can perform 1,000 transactions per second, while Steem can perform 10,000 to 180,000+ transactions per second compared to Litecoin’s meager 14 to 28 per second. VISA and Mastercard, by comparison, process somewhere in the thousands of transactions per second presently.
It’s important to note, however, that a new technology called the Lightning Network may be implemented within the Litecoin network even before it’s implemented on the Bitcoin network. This could potentially see transaction speeds in the millions or billions of transactions per second. It’s still too early to tell if this technology can work, however, as it’s currently in its testing phase.
Other cryptocurrencies such as IOTA and Byteball are also seeking to overcome the scaling issue with technologies that are different altogether from blockchains and involve no mining at all (albeit they are in their infancy, and IOTA, for one, has faced challenges with its technology).
Instead of using dedicated nodes, they use true peer-to-peer verification systems, with each entity that performs a transaction on the network also verifying other transactions at the same time. This means they could theoretically scale infinitely.
- Low Payment Acceptance: As with all cryptocurrencies, very few product or service providers accept payment in Litecoin. This disadvantage could be mitigated through the use of cryptocurrency loaded credit cards. These include Coinbase’s Shift Card, Monaco’s card, and Change’s and TenX’s upcoming cards that could be used to instantly convert cryptocurrencies to fiat currency on the spot for payment anywhere VISA or Mastercard are accepted. As one of the most popular cryptocurrencies, Litecoin is already integrated, or will be integrated into these cards.
- Legal Problems: Cryptocurrencies are facing tight restrictions and regulations in China, and other countries are also seeking to limit cryptocurrency trading and use. South Korea is now regulating exchanges to make sure all users are identity verified, while Russia is also hinting stronger regulation in the near future.
- Price Volatility: As with most cryptocurrencies, price volatility is a problem with Litecoin. Using Litecoin as a means of storing value mid or long term is therefore not for the risk averse, as its price has been known to fluctuate by double digit percentage points within days, hours, or even minutes.
This volatility comes from the highly speculative markets that cryptocurrencies are sold on, where price is driven by the quickly changing perceptions of a relatively small percentage of the population. Perceptions of value can and do change in the wind with news about government crackdowns on cryptocurrencies, hacks on major exchanges, or announcements of new technology being integrated. Litecoin itself may not even be the focus of a news story that sets its price plummeting, since cryptocurrencies in general usually follow the rise and fall of Bitcoin prices.
Some cryptocurrencies such as USDT and bitUSD have sought to alleviate this problem by creating what are called “stable coins”, which seek to tie the value of their currencies to a fiat currency, while others seek to tie their value, at least partially, to commodities like gold.
Litecoin, like most other cryptocurrencies, seems to have no plans to tackle this price volatility problem head on. Consensus in the cryptocurrency community seems to be that as markets become more mature and more capital enters the market, prices will naturally become more stable.
The cryptocurrency space is changing so fast that it’s hard to say what the future will bring for Litecoin, but we can say for sure that the development team is making an effort to adapt and improve to remain competitive. The name recognition and well-regarded team members alone are also worth something. Whether or not Litecoin is a good investment for you, whether you choose to buy it outright or invest in a mining operation, is up to you to decide.
Legacy Records, The First Record Label Paying Music Artists In Crypto
From painters to digital artists to musicians, crypto continues to find integration across artistic mediums. Music continues to be a field that is ripe for revitalization, from a business standpoint. Accordingly, a number of different musicians have been releasing songs and albums as NFTs. Now, we have what’s being reported as the first official record label looking to get involved. The label looks to have artists join the ranks of other musicians getting involved in crypto.
In a press release issued to start this week, Legacy Records CEO Keishia McLeod said it came down to “either get involved or get left behind”. McLeod cited unique income stream opportunities for artists and closed by saying that “this is the future, not a trend”. McLeod has stated previously her intent to drive the label to be at the forefront of leveraging emerging technology in music.
There are two major buckets contributing to Legacy’s approach. The first is the most notable, as the label will become the first to offer artists an opportunity to receive their advance and royalty payments in the form of crypto. The second is to engage artists with NFTs, allowing fans to participate in auctions for unique content. The label’s specific plans around NFTs, and number of artists seeking to get paid in crypto, have not yet been disclosed.
As the crypto market grows, both artists and businesses are getting involved | Source: CRYPTOCAP-TOTAL on TradingView.com
Legacy Music’s Broader Business Growth
Las Vegas-based Legacy Records, not to be confused with Sony’s Legacy Recordings, will look to take advantage of the potential press buzz from the announcement. However, in tandem with the release, the label also announced a to-be-name music distributor who has also agreed to pay Legacy Records artists in bitcoin. The label also merged with New Jersey entertainment lawyer Navarro Gray’s ‘The Gray Firm’, to provide legal guidance around digital execution.
McLeod has noted previously that the label has desired being a mainstay in revolutionizing the way music artists do business. In a January interview with the LA Tribune, McLeod cited Netflix’s impact on the film industry, adding that “we haven’t seen that yet in this industry, but it’s coming. We’re going to be a large part of making that happen”.
Related Reading | Reviewing Topps MLB’s First Swing At NFT Tech
Music Artists Emerging Into Crypto
Legacy’s roster has the potential to join a growing list of music artists that continue to engage with crypto and NFTs. Last month, we wrote about long-time hip-hop artist Eminem partnering with Nifty Gateway to release original instrumental beats. Saturday Night Live promptly had a sketch explaining the digital collectibles parodying Eminem’s “Without Me”.
Other musicians engaging with NFTs include DJ Premier, 3LAU, The Weeknd, Linkin Park’s Mike Shinoda, and more.
Each week, our team recaps the week’s NFT action with ‘NFTs In A Nutshell‘ – covering everything NFT, from sport, music, and more.
Featured image from Pixabay, Charts from TradingView.com
Coinsmart. Beste Bitcoin-Börse in Europa
XRP, Dogecoin, Chainlink Price Analysis: 17 May
Dogecoin required to counter bearish conditions before a jump above $0.569 resistance. Lastly, Chainlink needed to push above $45.5 to trigger a bullish comeback after a descending triangle breakdown.
Gains made over the last three days were impressive especially considering a bearish broader market, but sellers returned at $1.52-resistance. At press time, the cryptocurrency traded within the channel $1.52-$1.31 and reflected a degree of equilibrium between the buyers and sellers. For those hoping to make profits from a volatile XRP market, ADX’s movement dimmed expectations. Since mid-April, ADX has been on a steady decline and a period of consolidation seemed likely.
RSI hovered in the neutral territory around 50. A symmetrical triangle awaited a breakout to the upside and the Fibonacci tool presented a few target levels above the 200% extension level north of $3 (not shown).
On the daily timeframe, Dogecoin showed some sideways movement as bulls prepared for the next upswing. The channel between $0.523 and $0.373 was bolstered by the 20-SMA (blue) and formed a reliable buy zone should another dip occur.
As mentioned earlier, breaking above $0.569 resistance could trigger another rally in the DOGE market. Steering clear of $0.73-resistance would heighten the chances of DOGE touching $1. However, bearish conditions still presided and had to be countered first before any talks of an upswing. Awesome Oscillator noted bearish pressure after a series of red bars. MACD line remained below the Signal line but a bullish crossover could signal the onset of an uptrend.
Chainlink broke south from a descending triangle and a single candlewick dropped as low as $35.1- representing losses of 14% from the bottom trendline. Now below its 50-SMA (yellow) on the daily timeframe, bearish sentiment could lead to another sell-off towards $31 for LINK. On the other hand, some buying volume was noted on the 4-hour timeframe. A pickup in volumes and buying pressure could lead to a resurgence above $45.5 and this would likely push LINK beyond $50. A broader market recovery could act as a catalyst for such a price swing.
Meanwhile, RSI’s lower highs confirmed weakness after LINK formed a peak at $52.9. Even though Chaikin Money Flow dipped over the past couple of days, the index was still well above the half-line as capital inflows outmatched outflows.
Sign Up For Our Newsletter
Speculation Tesla Dumped Its Bitcoin Holdings Denied By Musk
Elon Musk puts to bed rumors that Tesla has sold its remaining Bitcoin holdings. The comments came following his second attack on the leading cryptocurrency. This time, he called out the dominance of Chinese mining pools in a now-deleted tweet.
Bitcoin continued from its weekend slide with another drop today, currently down 5% at the time of writing. Given Musk’s apparent influence on markets, some insist he exercises more restraint on social media.
Tesla Has Not Dumped Its Bitcoin
Last week, the Tesla boss announced his firm would no longer accept Bitcoin as payment for its EVs. The reason he gave was a growing concern about the use of highly polluting coal by miners.
This coincided with a mass sell-off in which Bitcoin was hit particularly hard, closing the day down 13% to $49.5k.
Today, Musk tweeted that Bitcoin is highly centralized due to the small number of mining pools that control the network. He maintains that coal is a significant power source for miners, despite counter claims that the network runs mostly on renewable sources.
“A single coal mine in Xinjiang flooded, almost killing miners, and Bitcoin hash rate dropped 35%. Sound decentralized to you?”
In amongst the responses, @CryptoWhale suggested that Tesla will sell their Bitcoin holdings. Adding that, if that happened, Bitcoiners would only have themselves to blame. He was referring to the outpouring of hate directed at Musk.
Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings.
With the amount of hate @elonmusk is getting, I wouldn’t blame him…
— Mr. Whale (@CryptoWhale) May 16, 2021
Musk replied to the tweet with a response of “Indeed.” Some publications interpreted this as confirmation that Musk had already dumped his Bitcoin holdings.
But in a semblance of grace, Musk put the record straight by saying Tesla has not dumped its BTC holdings.
“To clarify speculation, Tesla has not sold any Bitcoin.”
However, with everything that has gone on since last week, is it only a matter of time before Tesla sells up?
Musk Should Be Aware Of His Influence In Moving Markets
Key crypto figures have rallied together in support of Bitcoin. Michael Saylor announced a $15 million BTC buy adding to MicroStrategy’s already substantial war chest, while Jack Dorsey tweeted a message of support in improving its green credentials.
However, @PlanB took a less nuanced approach by accused Musk of deliberating trying to destroy Bitcoin. The comment came in a poll asking his followers whether Musk has derailed Bitcoin from meeting expectations per the stock-to-flow model (S2F).
S2F refers to a predictive model based on scarcity over time. PlanB, who adapted it for Bitcoin use, puts the price of BTC at a minimum of $100,000 by year-end.
The Managing Partner and Co-founder of Nexo, Antoni Trenchev, said Musk should “wake up” to his influence in moving markets.
“He has to wake up to the reality that with his following, even single-worded tweets can move markets.”
But as some would suggest, he is already well aware of his clout in that regard.
Source: BTCUSD on TradingView.com
Coinsmart. Beste Bitcoin-Börse in Europa
US Investment Bank Cowen to Offer Crypto Custody Services
Buterin Plugs UNI as Next Oracle Token
Which ‘green’ cryptocurrency is Tesla likely to add for payments?
Elon Musk Pokes Massive Hole in the Bitcoin Market After Halting Bitcoin Payments at Tesla
Facebook’s Diem Enters Crypto Space With Diem USD Stablecoin
Shiba Inu Coin – Is it Worth the Hype?
MicroStrategy Buys Another $15M Worth of Bitcoin at $55K
Diem parters with Silvergate bank to launch stablecoin in the US
DeFi Staple UMA Launches “Optimistic Oracle”
YooShi Launches MEME DeFi Token
The STC Token is Live – And Over 10 Crypto Exchanges are Ready for It
Diem Relocates From Switzerland to the US to Launch an USD-Backed Stablecoin
Here’s why Ethereum, AAVE, ALPHA are unfazed by Bitcoin’s latest ‘Elon candle’
Chiliz, Socios announce partnerships with three major Indian cricket franchises
Central Bank of Bahrain and JPMorgan to work on digital currency settlement pilot
Increasing Popularity of Crypto Pressures Samsung to Add Hardware Wallet Support to Its Galaxy Smartphones
Government Adoption: Cryptos are property in Texas, Hungary to cut taxes
Cardano DeFi Project deFIRE Secures $5M in Funding Round
Get the most out of social media with the Weentar blockchain platform
Coinbase Nets $771 Million Profit in Q1 2021
Blockchain6 days ago
Palantir Accepts Bitcoin for Payments and Considers Adding BTC to Balance Sheet
Blockchain1 week ago
Ray Dalio’s Bridgewater CFO leaves to work on Bitcoin full-time
Blockchain1 week ago
Ethereum price closes in on $4K as Shiba Inu (SHIB) steals Dogecoin’s thunder
Blockchain1 week ago
CFO of World’s Largest Hedge Fund Joins Institutional Bitcoin Firm NYDIG
Blockchain1 week ago
Ethereum (ETH) Hits $3800 ATH As Coinbase Premium Shoots With Institutional Interest
Blockchain1 week ago
Crypto Banter Will Give Away Over $500K To 10 Eligible Community Members
Blockchain1 week ago
Legendary Pelé NFT Set to Drop on Ethernity May 8
Blockchain1 week ago
Dogecoin Plummets 30% From Highs Following Elon Musk’s SNL Appearance