Litecoin (LTC) is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin is an open-source, global payment network that is fully decentralized without any central authorities. Mathematics secures the network and empowers individuals to control their finances. Litecoin features faster transaction times and improved storage efficiency than Bitcoin. With substantial industry support, trade volume, and liquidity, Litecoin is a proven medium complementary to Bitcoin.
Litecoin is an open-source software project released under the MIT/X11 license, which gives you the power to run, modify, and copy the software. While also being able to distribute, at your option, modified copies of the software. The software is released in a transparent process that allows for independent verification of binaries and their corresponding source code.
The Litecoin blockchain uses the proof-of-work consensus mechanism. Proof-of-work is used to determine how the blockchain reaches consensus, which is when a majority of the participants in the network agree on validating information. As a result, it confirms it and adds it to the blockchain. This consensus mechanism uses an advanced form of mathematics called cryptography; the mechanism uses mathematical equations that are so difficult that only powerful computers can solve them. In contrast to Bitcoin using SHA-256, Litecoin uses Scrypt in its proof-of-work algorithm, which, in theory, helps mitigate the centralization of the mining rewards.
The blockchain is capable of handling higher transaction volume than its counterpart – Bitcoin. And, due to its more frequent block generation, the network supports more transactions without a need to modify the software in the future. Miners that contribute to the Litecoin network are currently awarded 12.5 LTC per block, an amount that gets halved roughly every four years or 840,000 blocks. Therefore, the Litecoin network is scheduled to produce 84 million Litecoins, four times more than Bitcoin.
Litecoin has a faster confirmation time clocking at 2.5 minutes than its counterpart, Bitcoin. As a result, merchants get faster confirmation times while still having the ability to wait for more confirmations when selling more significant ticket items.
Litecoin was created by MIT graduate and former Google engineer Charlie Lee. Charlie is a very well-known developer and very active individual on social media who had the vision to create a lighter version of Bitcoin. A much cheaper and everyday purpose alternative. He conceived the project with support from other Bitcoin community members. Based on Bitcoin’s peer-to-peer protocol, Litecoin was launched on October 13th, 2011, as a Bitcoin fork with overall improvements.
Litecoin Atomic Swaps
Atomic Swaps are an outstanding smart contract technology, a peer-to-peer exchange of cryptocurrencies from one blockchain to another. This is particularly interesting because this exchange of coin doesn’t have to go through a crypto exchange. During the entire transaction, users always have full control and ownership of their private keys. Atomic Swaps can be executed either directly between separate blockchains with different coins or be performed via an off-chain channel, away from the main blockchain.
The first know successful atomic swap happened on September 20, 2017. Decred project and Litecoin completed the cross-chain atomic swap.
The way that Atomic Swaps work is by using Hash Timelock Contracts (HTLC). As the name implies, HTLCs are time-bounded smart contracts between parties, involving the generation of a cryptographic hash function that must be verified by each of the parties involved. Both parties must acknowledge receipt of funds within a specified timeframe using the previously mentioned hash function. If one of the parties fails to confirm the transaction within the set timeframe, the entire transaction will be voided.
Since Atomic Swaps directly connects two wallets, this process removes all the extra steps, fees, and confirmations that would’ve been needed to take place in exchange, thus becoming a much faster option for inter-blockchain transactions. This feature opens up a world of opportunities for merchants to use cryptocurrencies daily.