Litecoin was invented by Charlie Lee, who envisioned that Litecoin should behave to Bitcoin like silver to gold. So as a smaller crypto-currency, which nevertheless has its right to exist. Litecoin was also the second largest crypto currency after Bitcoin for a long time, but those times are over. The biggest differences to Bitcoin are the speed of transactions and the difficulty of mining. While Bitcoin finds a block every 10 minutes, Litecoin takes only a quarter of the time, i.e. 2.5 minutes. This leads to faster transactions.
The difference with mining is purely technical, here a different algorithm is used. Since Bitcoin requires pure computing power, this has led to the formation of huge mining farms that mine only Bitcoins all day long. This is more difficult with Litecoin, since the influence of the computing power is not as strong here. This results in a more even rate at which new Litecoin is mined.
Youtube-Video: What Is Litecoin? The Basics – For Beginners
Advantages of Litecoin
A big advantage of Litecoin is that its inventor Charlie Lee is publicly known. So he can influence the direction in which Litecoin should go in the future. With Bitcoin Core, which was invented by Satoshi Nakamoto, this is not possible, because nobody knows who exactly Satoshi Nakamoto is. This can also help to make the currency better known, since many people are influenced by public figures. So if the founder of a currency is known and can actively support the currency like with Litecoin, this is a great advantage.
Another advantage is the faster creation of a block. With Litecoin this takes only 2.5 minutes, compared to 10 minutes with Bitcoin Core. This means that transactions are processed faster and the money reaches the recipient faster. The costs for transferring Litecoin are also very low.
Disadvantages of Litecoin
Many critics of Litecoin find that Litecoin is virtually just a copy of Bitcoin itself. They are of the opinion that Bitcoin does not need any silver at all, since Bitcoin itself can be exchanged and used even in the smallest quantities. This is basically correct, but for small amounts of less than one Euro, Litecoin is much better suited than Bitcoin, since the fees are much lower. Whether this is enough to make the currency interesting for the population in the long run, no one can say, of course. Mining Litecoin is not profitable either, since the electricity costs are higher than the yield. Especially in Europe it is not worthwhile to mine for Litecoin as a private person at home. Even though it was more difficult to realize, Litecoin now has huge mining facilities in China and that is where most Litecoins are mined. This means that the distribution of the currency is of course also very uneven, as few companies mine large quantities of Litecoin. With Litecoin it is the same as with any other crypto-currency, only supply and demand decides the price. However, if few companies own large quantities of a currency, these companies can influence the market and distort the exchange rate. Therefore it is risky for investors to invest in Litecoin.
If the community loses confidence in the currency, the price can suddenly drop to zero.
Should I invest in Litecoin?
You should be very careful when investing. The same applies to all crypto currencies. They are a very speculative investment and you can lose money very quickly. Of course you can also be lucky and win a lot of money, but before you do so, you should intensively deal with the market and the different crypto currencies.
Litecoin e.g. offers actually little new and only small advantages to Bitcoin Core. Whether that is sufficient, in order to have in the future on the nevertheless very strongly contested market of the crypto currencies a chance, nobody can predict.
Money I would not invest however, it can go out well, but the probability that their money loses is far higher.
Is there a possibility to get crypto currencies without investment?
Yes, there is. It is also perfectly suitable to deal with the topic and to get a few Euros for free. This works with so-called faucets. With these faucets you can get small amounts of crypto currencies for free. You only have to answer Captchas correctly. The whole thing is financed by the advertisement which is shown on these pages. So you can get small amounts of Litecoins without risk and you can convert them into other currencies. This gives you a practical insight into the world of crypto currencies without having to invest money.
How do I create a Litecoin wallet?
There are several possibilities. The easiest way to create a wallet is to use a provider like Coinbase. Personally I use Coinbase and Jaxx. Jaxx is a provider with which you can easily create your wallet on your computer and only you have access. You can also synchronize your Jaxx account on your cell phone and have access to your Litecoin on the road. You can also convert your Litecoin with Jaxx directly into other currencies. This costs fees, but you can easily change from one currency to another. Also the support of Jaxx is highly recommended. I have personally contacted the support with a problem and got an answer within a short time. Even when I asked more detailed questions, I got an answer very quickly and this until all questions were cleared. This is exactly how support should work. But if you have a large amount of crypto currencies, you should play it safe and create a paperwallet. Then nobody can steal your Litecoin worldwide. How exactly this works, you can read here.
Conclusion about the crypto currency Litecoin
Litecoin is the little brother of Bitcoin. Litecoin was conceived in the same way by its inventor Charlie Lee from the very beginning. Technically it is not a groundbreaking innovation, but Litecoin is well suited for small amounts, as the fees are low and transactions are quickly confirmed. Whether this will be enough to survive in the market in the long run, however, no one can predict at the moment. The community could lose confidence in Litecoin at any time and this would result in a total loss. I would therefore refrain from an investment. The basic problems of crypto currencies such as the high technical entry hurdle and that mining is not lucrative are also not solved with Litecoin. How exactly Litecoin will continue and if Charlie Lee could create a permanent crypto currency with it, we will probably only find out in a few years.