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Litecoin: What it is, how it was born and what are its advantages

Litecoin What it is, how it was born and what are its advantages

What is Litecoin

Litecoin is a cryptocurrency supported by a p2p (open source) network, the same system by which Bitcoin is supported, but with a different mining system , it is not based on a system as centralized as Bitcoin. Data that can be seen as an advantage or an inconvenience, depending on what is analyzed, later we will analyze more deeply.

Regarding features like cryptocurrencies, they say that they stand out for being virtual, abstract and without physical form in relation to traditional currencies , data that we have already explained in previous posts of Bitcoin and Ethereum .

How was it born?

The birth was on October 5, 2011 at the hands of Charlie Lee, a software engineer, trained at MIT and a former Google employee . Litecoin was created to cover the drawbacks of Bitcoin, such as the centralization of the offer and the timing of its transactions .




On the other hand, Lee is not intended that  s eja a substitute for Bitcoin, you want to coexist together , to complement one another, so it created the litecoin with a different mining system.

Benefits

The advantages of Litecoin as a cryptocurrency are as follows:

  • There is no government that can control its value
  • Very difficult to counterfeit if compared to traditional currencies
  • Open source system , allowing improvements to be implemented over time
  • Physical advantages, such as infinite durability , while the euro or the dollar are physical products, deteriorate over time.
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On the other hand, Bitcoin and Litecoin are not the same. The main differences that exist between them are:

  • Outstanding units . While Bitcoin is limited to 21 million units, Litecoin has a limit of 84 million.
  • Different mining . Although both are managed on an open source platform, Litecoin’s mining is based on the Scrypt algorithm. And what does this mean ?. That s ignifica that there is no centralization of mining, because there is no specific equipment for the same. For this reason, Litecoin’s growth was not as strong as that of Bitcoin, but thanks to decentralization they have allowed access to mining for more people.
  • Less time on transactions. At least when the cryptocurrency was created in 2011, Litecoin’s transaction time was much shorter, about 2-3 minutes, compared to 10-15 minutes of Bitcoin.

The US dollar, a change in trend?

We said last week that it was possible that the stock market reaction to Apple’s results would be positive , since the shares of the Cupertino company had fallen for several days and could have a surprise effect, and that is how it has been.

The Apple shares they marked their all-time high last Friday and helped American indices save what would be a week of losses.

This weakness of the American Stock Exchanges, with the exception of the technological ones , is closely related to the evolution of the dollar. As seen on the future dollar chart in recent years, the dollar almost reached parity with the euro in early 2017 , after Trump’s victory in the American elections, within an upward trend that I have maintained since the summer of 2008.

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However, in 2017 and January 2018, the dollar turned and began a trend decline against the euro and against other currencies. The spectacular rise of the American Stock Exchanges was in line with the weakness of the dollar, in the understanding that a weak dollar favored the American economy and companies.

Well, starting in February of this year , the dollar reached its lowest point against the euro, slightly above $ 1.25 per euro , and started an increase, which coincided with a correction phase in the stock markets, and The past two weeks have been accentuated until the dollar closed last Friday at $ 1,195 per euro.

Has the dollar been reversed ? Have you started a new bullish phase? The answer is probably in the Fed , because if it continues its program to raise interest rates and withdraw liquidity, it will be very difficult for the dollar to continue to rise, which is still worrying for some emerging economies.

We would bet for a stronger dollar in the coming months, in the heat of the Fed’s decisions, although probably in the short term it should rest a little after last week’s strong increases. We take advantage of levels above US $ 1.20 per euro to take positions in the dollar.