Cryptocurrencies like normal currencies as we know them are growing in the number available.
Even though Bitcoin is the best known as the first cryptocurrency that became known worldwide there are a lot of other crypto-currencies that are in competition and they all have their different features and advantages and basically, it is up to the cryptocurrency enthusiast which one they would prefer to mine.
Like all cryptocurrencies, it is not a government issued currency but mined similarly to Bitcoin but with the exception that Litecoins also have a fixed supply and ultimately there will be a total of 84 million litecoins that will be in circulation. It does, however, have a faster block generation and it is 4 times faster than that of Bitcoin.
This creates transactions faster and the block are verified by the mining software and made visible to a "miner" who wants to see it and once it has been verified the next block enters the chain.
How to mine for Litecoin
The main incentive is that the miner that verifies the first block will be rewarded with 50 Litecoins and will be reduced with time and will only be worth half and that process will continue until the 84th million Litecoin is mined. The amounts will be reduced periodically at set intervals
There is no room for any fraudulent mining practices because it will be noticed by another miner and the only way that double transactions can be done will have most of the miners to agree to the false process which in reality is virtually impossible.
Mining normal cryptocurrencies like Bitcoin you need a processor that has an unbelievable amount of processing power and that is not usually available with normal computers off the shelf. With Litecoin using a scrypt algorithm and even though it uses SHA-256 algorithm the calculations are serialised and this favours RAM speed rather than CPU power.
With the growing value of Bitcoin, the miners are trying to get as many Bitcoins as possible and creating a war of computer power. The person with a more efficient computer chip stands a much better chance of acquiring more Bitcoins than the miner that is using the more conventional ways of mining. This is all because of the hash cryptography that is used to mine Bitcoins.
Litecoin takes away this type of advantage as it requires more memory rather than processing power and the need to design a more powerful chips falls away. It requires larger memory and it means that you will need to buy a computer with more hardware.
How Litecoin Transactions Differ
Litecoin due to the faster block creation can manage a lot more transactions than other cryptocurrencies such as Bitcoin. As an example with Litecoin because it creates a block every 2,5 minutes a merchant will be able to complete two transactions but with Bitcoin will only be able to a transaction every 10 minutes
However, there is a disadvantage of having blocks created at a higher volume because the blockchain will be proportionately bigger and results in more orphaned blocks.
With the faster block time that Litecoin has, it does reduce the risk of double spending attacks but it all relies on both networks having similar hashing power.
Litecoin is generally known as the silver digital currency after Bitcoin being the gold equivalent. They are both deflationary currencies and it remains to be seen how the difference of supply will affect the value in the future years. With Litecoin aiming to have an ultimate limit of 84 million coins as compared to Bitcoins 21 million and how it will affect the ultimate price. At the moment the value of Litecoin is approximately 20% of that of Bitcoin but it can still attract a lot of investment.
Litecoin has not been accepted as well as Bitcoin as yet and even though the number of users globally is very small with the growth of cryptocurrencies and the increase in value which investors have enjoyed there is bound to be a growing consumer base. This growth is bound to create stability and Litecoin could be the next Bitcoin but that will have to remain to be seen.
Since both currencies will eventually reach their ultimate amounts there could even be a time when Litecoin will take over as the investment choice for cryptocurrency enthusiasts.