Litecoin: what’s behind the fastest growing Bitcoin alternative

In the last hours the value of Litecoin is skyrocketing in such a way that even its creator has had to go out on social networks to ask us that we do not do crazy things. But despite the warnings, the reality is that the cryptocurrency has been skyrocketing for two days, and only in the last 24 hours its value it has grown between 70 and 80 percent.

But what exactly is Litecoin and what is behind this low-cost alternative to Bitcoin? Both are open source cryptocurrencies, one heir to the other, and while Bitcoin aspires to become a substitute for digital gold, Litecoin wants to be silver. But There are some differences as for its philosophy and the algorithm that marks its operation that should be reviewed.

What is Litecoin?

Litecoin is a decentralized P2P cryptocurrency created by Charlie Lee in October 2011. It was created as an open source project inspired by Bitcoin, so it is practically identical in most of its technical aspects. In the end, what is involved in both cases is to allow one person to send money to another without intermediaries such as banks and anonymously and safely.

However, there are at least four fundamental differences between Litecoin and Bitcoin: its speed, its number of coins, its market capitalization and some algorithm changes. They are not big differences, but they are enough to change his philosophy slightly.

For starters, the first big difference is the speed at which transactions are made. The Litecoin network performs the processing of a block every 2.5 minutes instead of every 10 minutes, which means that it generates the blocks of its chain four times faster than Bitcoin. This helps you confirm faster transactions.

The number of Litecoins is also finite. But if there will only be 21 million Bitcoins, 84 million Litecoins will be created.

Second is the amount of coins you plan to generate. One of the things that gives the most value to Bitcoin compared to conventional currencies is that it generates a fixed amount of new currencies every year, and that their number is finite. Bitcoin will stop creating new units when it reaches 21 million coins, while Litecoin will do so at 84 million.

Then there is the fact that Litecoin was the first coin to change the hashing algorithm and used scrypt. The first benefit of this change is that it makes any PC capable of mining, turning its back on professional miners and democratizing the creation of cryptocurrency a bit. Also, verifiers are more distributed than with SHA-256 based currencies.

And then we have your market cap, which is a measure by which its economic dimension is measured. For those of us who do not know economics, this measure may be a bit ambiguous, but you can get an idea if we tell you that that of Bitcoin right now is 288,687 million dollars, while that of Litecoin is only 17,842 million. Despite that, Litecoin is right now the fourth most valuable cryptocurrency in the market, which is not bad either.

Why is it growing so much?

This is the big question that everyone is asking, why suddenly the value of Litecoin has started to skyrocket. Some media point out that it may be due to how exaggeratedly high the value of Bitcoin is starting to be, which is causing many to see his little brother as an interesting opportunity to jump on the cryptocurrency bandwagon with another that has the same potential to start growing.

This interest in turn has a draw effect, since when you begin to notice the growing inertia of the value of the cryptocurrency there are other people who take positions not to be left behind in the event of a massive escalation in value such as that seen in Bitcoin.

This escalation in the value of Litecoin is causing many of the platforms that, like Coinbase allow your purchase, begin to warn your users that take the necessary precautions when investing. Even Charlie Lee himself, the creator of the cryptocurrency, has warned to users of the dangers of going crazy and that we are aware that its price can plummet as it has happened other times.

“Buying LTC is extremely risky,” he said in a tweet. “I hope we have a bumpy year in the market like the one we just had, where the LTC value fell 90% (from $ 48 to $ 4). So if you can’t afford a LTC drop to $ 20, don’t buy! ! “.

In another tweet He has also said that when a cryptocurrency rises too fast it exceeds its real value, which can cause the market to start to go down to normalize it. It will be interesting to see how the events unfold in the coming days and how the value of the new successful cryptocurrency evolves.

Image | BTC Keychain
In Engadget | The number of bitcoins is finite, there cannot be more than 21 million: what is expected to happen then?

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Litecoin: what’s behind the fastest growing Bitcoin alternative

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