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When most people hear about cryptocurrency, they think of Bitcoin. However, there are over 100 digital currencies in circulation. Litecoin is arguably one of the most notable alternatives to Bitcoin. In regards to market capitalization, Litecoin ranks as the third-largest currency in its category. The first position is held by Bitcoin while XRP ranks second.
Litecoin has been around since 2011 and it has only grown from strength to strength. The best part is that individuals and businesses can transact this cryptocurrency without a third party. You don't need a money processing platform or bank to carry out transactions with this currency.
Litecoin functions like PayPal and other digital payment platforms. Some of its users treat it as a money transfer medium. Nevertheless, it doesn't use dollars, euros, or other popular mainstream currencies. Instead, it relies on units of Litecoin.
How Is Litecoin Made?
Unlike mainstream currencies, governments do not issue cryptocurrencies. Therefore, most of them are created through mining. Litecoin is no exception. The circulation of this currency in the market is always limited. At any given time, there can only be 84 million Litecoins in circulation. As such, this digital is quite valuable.
Mining for Litecoin
Mining for Litecoin is all about verifying a block. The miners who do so get a generous reward of 50 Litecoins. With time, miners receive fewer coins for performing this task. Mining this currency is a tremendously safe activity. Unscrupulous traders have no choice to interfere or sabotage this process.
What's more is that mining doesn't demand a powerful computer. Miners can use regular computers without any qualms. Nonetheless, a fast and robust computer increases your chances of earning something substantial. You could even use ltc as collateral for a loan. Your local bank may not accept it, but other lending institutions take it.
The Value of Litecoin
If society doesn't think a particular currency has any value, then it is impossible to value it. When any government decides to print and release a specific currency in excess, the banknote drops in value. Imagine what you think as a stellar service offered by lots of business. You will no longer value it as much. The people behind Litecoin had already thought of this, that is why they capped circulation of this currency at any given time. They do not want it to flood the market.
How Litecoin Compares to Bitcoin
With Litecoin, it takes a shorter time to generate a block. On the other hand, it takes longer to create a bitcoin block. The bottom line is that you can make many more transactions using Litecoin than you could with Bitcoin. It also boasts a superior storage efficiency than most cryptocurrencies and faster confirmations after a transaction is made. Concerning transaction fees, Litecoin comes out as the cheaper option compared to other currencies. For instance, PayPal charges 3% while the Litecoin transaction fee stands at 1/1000.
Litecoin may not be the most popular digital currency around, but it has certainly cemented its position. If you love to trade in crypto, adding this currency to your portfolio is a brilliant idea.
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