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Litecoin was designed to be used for cheaper transactions, and to be more efficient for everyday use. In comparison, bitcoin was being used more as a store of value for long-term purposes. The coin limit market cap is much higher on litecoin than bitcoin, and the mining process far quicker. This means transactions are faster and cheaper, although generally smaller in size.

Like bitcoin, litecoin is a form of digital money. Utilising blockchain technology, litecoin can be used to transfer funds directly between individuals or businesses. This ensures that a public ledger of all transactions is recorded, and allows the currency to operate a decentralised payment system free from government control or censorship.

Litecoin is a peer-to-peer cryptocurrency that was set up by Charlie Lee in 2011. Litecoin shares many similarities with bitcoin and is based on bitcoin’s original source code.

Litecoin involves the creation and transfer of digital coins via an open source, cryptographic protocol. It uses blockchain technology to record a decentralised, public ledger of all transactions.

The blockchain is a shared digital ledger which holds a record of all litecoin transactions. Recent cryptocurrency transactions are grouped together into ‘blocks’ by miners. The blocks are then cryptographically secured before they get linked to the existing blockchain. Similar blockchain technology is used for a number of different cryptocurrencies, including litecoin and bitcoin.

Mining is the process of securing each block to the existing blockchain using mining software. Once a block is secured, new units of cryptocurrency get released. Miners can inject these units directly back into the market.What are the differences between litecoin and bitcoin?While there are many similarities between bitcoin and litecoin, some of the subtle differences include:

While litecoin requires more sophisticated technology to mine than bitcoin, blocks are actually generated up to four times faster. Litecoin also processes financial transactions a lot quicker, and can also process a higher number of them over the same time period.

Both bitcoin and litecoin have a finite number of coins in circulation. Bitcoin has 21 million coins available, while litecoin has 84 million available – four times more than bitcoin.

Litecoin has a much smaller market cap than bitcoin, but is still one of the most traded cryptocurrencies.

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