How does Lettercoin work? Is Lite Coin Safe? Litcoin is a digital currency similar to Bitcoin. It was launched by Charlie Lee, a former Google and Coinbase engineer, at the end of 2011. The operating principle of Lite Coin is similar to Bitcoin, but the supply is higher and the transaction speed is faster. Like Bitcoin, Litcoin is a decentralized currency that is not restricted by the censorship system and is open to the public. Litcoin runs on its own point-to-point blockchain network, becoming one of the largest digital networks in the world. Since its first issuance in 2011, the trading volume of Lite Coin has reached billions of dollars, and the running time has reached 100%. Different from the traditional fiat currency, the supply of Lite Coin is limited. The supply is four times of the total supply of Bitcoin. Finally, only 84 million Lite Coins were put into circulation.

How does Lettercoin work?

As an improved version of Bitcoin, Litcoin aims to facilitate cheaper and more efficient transactions than Bitcoin network. Like Bitcoin, Litcoin also uses the workload proof mechanism to enable miners to earn new tokens by adding new blocks in the blockchain. However, Litcoin does not use Bitcoin's SHA-256 algorithm, but uses Scrypt, a hash operation. This operation can generate new blocks every 2.5 minutes, while Bitcoin blocks take an average of 10 minutes to confirm.

Scrypt was originally developed by the Letcoin development team, aiming to develop its own decentralized mining ecosystem outside the Bitcoin system, and make it more difficult for 51% to attack Letcoin. In the early days, users using traditional GPU and CPU cards were more likely to mine in Scrypt, which was to prevent the special integrated circuit (ASIC) mining machine from leading the mining of Lite Coin. But later, ASIC mining machine was developed to efficiently mine Lettercoin, which led to the elimination of GPU and CPU mining.

Due to some similarities between Bitcoin and Litcoin, developers often use Litcoin as a "testing ground" to try blockchain technology that will run in Bitcoin. For example, SegWit was first tried in Lite Coin before it was run in Bitcoin in 2017. SegWit is planned to run in Bitcoin in 2015, aiming to separate digital signatures from each transaction, make better use of the limited space in the block, and thus expand the blockchain. The blockchain can therefore handle more transactions per second (TPS).

Another expansion scheme is Lightning Network, which is also tried in Litcoin before running in Bitcoin. Lightning network is one of the key factors for higher trading efficiency of Letcoin. It is a Layer 2 protocol created on the top of the Letcoin blockchain, which is composed of micro payment channels generated by users, with low transaction costs.

In addition, Letcoin aims to solve the problem of transaction privacy by adopting privacy oriented protocols and the Mimblewimble Expansion Block (MWEB). It is named after the tongue locking incantation in the Harry Potter series, which can prevent the victim from disclosing information. Similar to this mantra, MimbleWimble allows complete anonymity of transaction information, including sender and receiver addresses and the number of cryptocurrencies sent. At the same time, MWEB cancels useless transaction information, the block size is more compact, and the expandable space is larger. As of December last year, the Letcoin MWEB protocol was still under development.

Is Lite Coin Safe?

In terms of storing Lite Coin, security depends on which storage device you use. Cold wallets are usually more secure than hot wallets because they are not vulnerable to hackers. But the hot wallet is more convenient than the cold wallet, because the hot wallet can be directly used on your phone. Therefore, the storage method of Letcoin depends on the user.

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Speaking of this, I believe you will understand how the Lite Coin works after reading the above content. In short, whether the Lite Coin is safe depends on the storage device you use. Generally, the cold wallet is safer than the hot wallet. And Lite Coin is also an upgraded version of Bitcoin. They are similar in many aspects, but Lite Coin does have higher supply, faster transaction speed and lower transaction cost. Since its first launch in 2011, Lite Coin has always been committed to becoming "Lite Silver", which is also known as Bitgold. In terms of market value, it is not as popular as Bitcoin or Ethereum, but the Letcoin community expects further development and continues to optimize functions and use cases.