Hi there and welcome to the world of cryptocurrency! If you’re reading this then you’re in luck. You now have the opportunity to become an early adopter of a financial revolution that is taking the world by storm. But before you purchase Litecoin, or any cryptocurrency for that matter, it is important to understand what exactly it is that you are buying. This guide will give you a quick overview of what cryptocurrency is as well as a brief history of Litecoin.
What is Cryptocurrency?
“The most interesting and useful thing about blockchains is their ability to empower people in new ways. Blockchains put power in the hands of people, and take it away from large institutions.” -Nick Tomaino
Cryptocurrency is an alternative form of payment to cash, credit cards, and checks. The technology behind it allows you to send it directly to others without going through a 3rd party like a bank. This means you don’t have to use your social security or credit score as collateral and allows you to be reasonably pseudonymous.
As you can imagine, there are many exciting use cases for this. You can send money back to your family without incurring hefty international fees if you’re working a different country. Merchants no longer have to worry about payment fraud or invalid checks because people can only spend what they have. This “peer to peer” economy is all made possible through something called “blockchain technology.”
*Sidenote: I will use Litecoin (LTC) as my currency of choice for the rest of this article.
What is Blockchain Technology?
In its simplest form, blockchain is data. It’s a list of recorded information called “blocks” strung together in a chain. Think of blocks as folders stuffed with information i.e. how much Litecoin was sent, who sent it, and who received it. The great thing about blockchains is that it’s public and anyone in the world can see it. You can literally go back to January 1, 2015 at 10:15am and see if any LTC was sent at that time! The fact that it acts like a ledger is one of the many reasons why people see value in it.
Now when you send LTC, the Litecoin Network broadcasts this transaction to miners through your wallet. Miners then lump your transaction, along with many other transactions, into a single block a.k.a. folder. They then use powerful computers to solve equations in order to add it to the blockchain. Now that you have a general understanding of how blockchains work, let’s talk about Litecoin!
What is Litecoin?
Currently, Litecoin is in the top 10 of over 1,000 cryptocurrencies listed on coinmarketcap.com (this website is a great resource because it keeps track of all the cryptocurrencies that you can trade). It was created by a former Google employee named Charlie Lee. He initially got involved in the cryptoscene by attempting to revive a coin called Fairbrix. Unfortunately, it was a failure because of a bug that stopped Fairbrix blocks from producing coins as well as a 51% attack from the moment of its re-release. However, Charlie did not give up. Instead, he pressed on by looking at the source code for Bitcoin and then making a few adjustments he thought were necessary. Finally on October 7, 2011, Charlie released an open-source client on github called “Litecoin.”
Currently, Litecoin has 4 distinct advantages over Bitcoin:
- Speed- Litecoin is confirmed faster than Bitcoin because it generates a block every 2.5 minutes as opposed to Bitcoin’s 10 minutes. This means you get your money quicker.
- Liquidity- Litecoin will produce a total of 84 million coins as opposed to Bitcoin’s 21 million. This means that it will be more readily available for daily purchases instead of being hoarded like Bitcoin.
- Equality- Litecoin miners use a slightly different mining protocol which creates a fairer distribution of coins.
- Technology- Litecoin is capable of testing and implementing technology faster than Bitcoin. For example, Litecoin pioneered the way for the technology called Segregated Witness by implementing it three months before Bitcoin. This technology is significant because it allows both Bitcoin and Litecoin to scale by making them faster and creates lower transaction fees.
With all that being said, it is important to note that Litecoin was created to complement, not replace, Bitcoin. The reason for this is because Bitcoin can’t scale to become a global currency. In light of this, Charlie believes Bitcoin should be treated like gold; a store value. It should be used for larger purchases, such as houses or cars, because it is so expensive and takes longer to confirm. Litecoin, on the other hand, should be used for your everyday purchases such as groceries, meals, and gas. In this way, Charlie envisions Bitcoin and Litecoin co-existing together by serving different purchasing purposes.
To be clear, in my humble opinion, this doesn’t limit Litecoin’s potential price growth but increases it by being able to provide a service Bitcoin is ill equipped to do.
Now that you understand what cryptocurrency and Litecoin is, I will walk you through what a Litecoin wallet is next. When I first got into cryptocurrency, I lost a few hundred dollars worth of coins because I didn’t understand how wallets or addresses functioned. I do not want this to happen to you.
But if you want to buy Litecoin right now, click here for a step by step guide if you’re in North America or Europe.
If you’d like to learn more about the impact blockchain technology is making in the world, read The Internet of Money. Andreas M. Antonopoulos is an absolute stud in the Bitcoin education sphere and explains the why of cryptocurrency and how it’s “disrupting antiquated industries to bring financial independence to billions…(and) changing our approach to solving social, political, and economic problems through decentralized technology.”
Official Litecoin Websites:
- www.reddit.com/r/litecoin (I’m a moderator here. Come say hi!)
- http://explorer.litecoin.net/ ←Input your address to check your LTC balance and transactions.
- https://chainz.cryptoid.info/ltc/ ← Another site you to check your balance and transactions.
Remember to give me claps to the left, donations below, and share with your friends! Until next time, onwards and upwards. 😁
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