What are Litecoins?
Litecoins are a virtual currency that can be used to buy and sell goods and services. All Litecoins exist purely online and don’t have a physical presence but despite that, they have a genuine value. This value is generally defined by online currency websites that trade in Litecoins and other virtual currencies.
Litecoins are created through the action of ‘Mining’ whereby computers solve increasingly difficult mathematical equations and in doing so are rewarded with Litecoins. Any computer with a good graphics card (GPU) can mine for Litecoins, though the difficulty of the mathematical equations is currently quite high, which means mining a single coin can take a few days.
Litecoin is different in some ways from Bitcoin.
- The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin’s 10 minutes, which its developers claim allows for faster transaction confirmation.
- Litecoin uses scrypt in its proof-of-work algorithm, a sequential memory-hard function requiring asymptotically more memory than an algorithm which is not memory-hard.
Due to Litecoin’s use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for Bitcoin, which uses SHA-256.
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