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Created in 2011, Litecoin is an evolution of Bitcoin. It’s built upon a modified version of Bitcoin’s original code.
As such, the two cryptocurrencies have a lot in common. However, specific code and algorithmic changes enable Litecoin to transact quicker and more cheaply than Bitcoin. This makes Litecoin a useful method for small payments.
Litecoin is the 10th largest cryptocurrency by market capitalisation, currently valued at $4.27bn. It’s used to purchase goods and services, or make payments. It can also be bought and traded on exchanges like BTC Markets.
How can Litecoin transact quicker and cheaper than Bitcoin? Why is it ideal for small payments? How is new Litecoin created? This guide answers those questions.
How does Litecoin transact faster and more cheaply than Bitcoin?
Litecoin transacts quicker than Bitcoin due to its ‘confirmation time’. Confirmation time is the period between submitting a cryptocurrency transaction and the assets being received. Litecoin’s confirmation time is 2.5 minutes. Compare this to Bitcoin’s 10 minutes, which is four times longer.
Bitcoin’s payment network can get busy. After all, it’s one of the most widely used cryptocurrencies in the world.
Computers processing Bitcoin payments work harder when network demand increases. To pay for this, transaction fees rise. The busier the network, the greater the fee. Users can even pay higher, specified fees to increase the speed of their transactions.
Litecoin’s network operates in much the same way. However, as its confirmation time is quicker, the network is less congested. This keeps transaction fees lower.