coins to stand out given the crowded field, Litecoin (LTC) is one non-Bitcoin crypto that has managed to stand up to the competition. LTC currently trails behind.
Table of contents
- 0.0015 bitcoin in dollar?
- The basics for a new user.
- What will the Bitcoin price do?!
Gold has industrial uses and jewellery can be made from it. The South Sea Company and millennial tech stocks at least promised streams of future dividends. Even tulips can be admired for their beauty. It is a Seinfeld asset — a speculation based on nothing. The price of bitcoin is partially based on speculation and could burst like a balloon. But even if we accept the limit at face value, there is no limit on the creation of other cryptocurrencies.
There are literally thousands of them already, such as Litecoin, Tether and Dogecoin. In any case, just because something is in limited supply, that does not inherently make it valuable. Another argument for Bitcoin says it could be an alternative to traditional currency for making payments. The first purchase made with Bitcoin was more than a decade ago: two pizzas, paid for with 10, bitcoins.
Despite the hype, very few vendors accept Bitcoin and hardly anyone pays with it. A Sydney art gallery that accepts Bitcoin has never had anyone buy anything with it, while a bar that accepts it reports no customers using it for years. Even some crypto conferences refuse to accept Bitcoin. Picture: Amazon Source:Supplied. This is unlikely to change materially.
Tesla has hinted it may accept Bitcoin in future, but so far does not. There are inherent limits to the ability of Bitcoin to provide payment services. Transactions may be stuck in a queue for hours. If any electronic currency becomes a significant payment medium, it is likely to be a central bank digital currency which would be legal tender and able to be used for very large numbers of transactions. Musk has plans to colonise Mars, so maybe he will declare Bitcoin the legal tender there.
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Log out. John Hawkins. Video Image Bitcoin is an online currency created from computer code, but how does it work and why do people use it? Related topics Elon Musk. Caddick case reveals huge Aussie crisis. The main focus of this interest has been Bitcoin , which has long been the dominant name in cryptocurrency—not surprising since it was the first digital money to really catch on.
Since the founding of Bitcoin in , however, hundreds of other cryptocurrencies have entered the market. LTC currently trails behind Bitcoin as the 6th-largest digital currency by market cap. On the surface, Bitcoin and Litecoin have a lot in common. At the most basic level, they are both decentralized cryptocurrencies.
Whereas fiat currencies such as the U. Litecoin was launched in by former Google engineer Charlie Lee, who announced the debut of the "lite version of Bitcoin" via a posted message on a popular Bitcoin forum. For this reason, Litecoin adopts many of the features of Bitcoin that Lee and other developers felt were working well for the earlier cryptocurrency, and changes some other aspects that the development team felt could be improved.
One important similarity between Bitcoin and Litecoin is that they are both proof of work ecosystems. That means the underlying process by which both cryptocurrencies are mined—that is, generated, authenticated, and then added to a public ledger, or blockchain—is fundamentally similar though not exactly the same, as we will see below. For an investor, many of the basic elements of transacting with Bitcoin and Litecoin are very similar as well. Both of these cryptocurrencies can be bought via exchange or mined using a mining rig.
Both require a digital or cold storage "wallet" in order to be safely stored between transactions. Furthermore, the prices of both cryptocurrencies have over time proven to be subject to dramatic volatility, depending upon factors ranging from investor interest to government regulations.
One area in which Bitcoin and Litecoin differ significantly is in their market capitalization , the total dollar market value of all the outstanding coins. Bitcoin as a network still dwarfs all other digital currencies. Another of the main differences between Bitcoin and Litecoin concerns the total number of coins that each cryptocurrency can produce. This is where Litecoin distinguishes itself. The Bitcoin network can never exceed 21 million coins, whereas Litecoin can accommodate up to 84 million coins.
In theory, this sounds like a significant advantage for Litecoin, but its real-world effects may ultimately prove to be negligible. This is because both Bitcoin and Litecoin are divisible into nearly infinitesimal amounts. In fact, the minimum quantity of transferable Bitcoin is one hundred millionth of a bitcoin 0. Users of either currency should, therefore, have no difficulty purchasing low-priced goods or services, regardless of how high the general price of an undivided single Bitcoin or Litecoin may become. In November , IBM executive Richard Brown raised the prospect that some users may prefer transacting in whole units rather than in fractions of a unit, a potential advantage for Litecoin.
Although technically transactions occur instantaneously on both the Bitcoin and Litecoin networks, time is required for those transactions to be confirmed by other network participants. Litecoin was founded with the goal of prioritizing transaction speed, and that has proven an advantage as it has grown in popularity.
According to data from Blockchain. In principle, this difference in confirmation time could make Litecoin more attractive for merchants. For example, a merchant selling a product in exchange for Bitcoin would need to wait nearly four times as long to confirm the payment as if that same product were sold in exchange for Litecoin.
Bitcoin - Wikipedia
On the other hand, merchants can always opt to accept transactions without waiting for any confirmation at all. The security of such zero-confirmation transactions is the subject of some debate. By far the most fundamental technical difference between Bitcoin and Litecoin are the different cryptographic algorithms that they employ. Bitcoin makes use of the longstanding SHA algorithm, whereas Litecoin makes use of a comparatively new algorithm known as Scrypt. The main practical significance of these different algorithms is their impact on the process of mining new coins. In both Bitcoin and Litecoin, the process of confirming transactions requires substantial computing power.
Some members of the currency network, known as miners, allocate their computing resources toward confirming the transactions of other users. In exchange for doing so, these miners are rewarded by earning units of the currency which they have mined. SHA is generally considered to be a more complex algorithm than Scrypt, while at the same time allowing a greater degree of parallel processing.
Consequently, Bitcoin miners in recent years have utilized increasingly sophisticated methods for mining bitcoins as efficiently as possible. The practical consequence of this has been that Bitcoin mining has become increasingly out-of-reach for the everyday user unless that individual joins a mining pool. Scrypt, by contrast, was designed to be less susceptible to the kinds of custom hardware solutions employed in ASIC-based mining. This has led many commentators to view Scrypt-based cryptocurrencies such as Litecoin as being more accessible for users who also wish to participate in the network as miners.
Given all the hoopla around its prices and market cap, it may seem that Litecoin exists mainly to be bought and sold back and forth, to paraphrase the old traders' joke about soybeans. In actuality, though, Litecoin— like all cryptocurrencies—is a form of digital money.
Choose your Bitcoin wallet
So it can be used by individuals and institutions to purchase things and to transfer funds between accounts. Its relative speed and cheapness make it ideal for smaller, everyday transactions. Participants operate directly, without the use of an intermediary like a bank, credit card company, or payment processing service. You can convert litecoins to bitcoins, and vice versa—similar to the way you can exchange fiat currencies, like changing dollars into pounds, or yen into euros.
Since both are leading, and highly liquid cryptocurrencies, there is generally no problem in swapping one for the other. To do so, you need to have an account with a cryptocurrency trading or exchange platform or trading app. The amount you'll receive in the conversion depends, of course, on the current prices for each currency.
It's important to understand cryptocurrency conversion because you can't send Litecoin to a Bitcoin address—even if it's in the same wallet—and vice versa. If you do, the money will be lost. Recovery may be possible if you have seed backups for the keys that let you access your account, but it's difficult.
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Whether Litecoin could ever overtake Bitcoin as the number one cryptocurrency is a matter of speculation. Bitcoin remains the original digital money, and to many, its name is synonymous with cryptocurrency in general— practically a generic term, like Kleenex is to facial tissue. If any other crypto were to knock Bitcoin off the throne, Ethereum the current number two , or one of the other higher-ranked currencies might be more likely candidates. Still, some analysts like Litecoin's fundamentals.
While Bitcoin and Litecoin may, relatively speaking, be the gold and silver of the cryptocurrency space today, history has shown that the status quo in this fast-moving and still-developing sector can change in even a few months. It remains to be seen whether the cryptocurrencies with which we have become familiar will retain their stature in the months and years to come. Library of Congress Business Reference Services.
Forex Ratings. Bitcoin Forum. Bitcoin Wiki. Brown About Bitcoin and Litecoin. Bitcoin Magazine.