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The validity of transactions in the cryptographically protected block is checked and confirmed by the collective computing power of the miners in the network. On an individual basis, miners are computers that are configured to use their GPU or *****U cycles to solve complex mathematical problems, passing the block data through a hashing algorithm until a solution is found.Most home computer networks today are peer-to-peer networks. Residential users configure their computers in peer workgroups to allow sharing of files, printers, and other resources equally among all of the devices. Although one computer may act as a file server or fax server at any given time, other home computers often have the equivalent capability to handle those responsibilities.bitcoin cards dwarfpool monero casinos bitcoin

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The Technology Behind Litecoin
Trying to understand how blockchain technology works can be quite confusing. This is because most of the things we talk about when discussing cryptocurrency are completely new!

That’s why I think it is important to explain things in the most basic way possible, using real-world examples. So, let’s find out a bit more about Litecoin blockchain technology.

What is Litecoin? The Complete Litecoin Review

In our previous example, we explained how John (from the UK) wanted to send Bob (from Kenya) some funds. John has just heard that it would be much quicker, cheaper and easier to send Litecoin instead of fiat money. Let’s find out how he can do this.

To receive funds, you need a Litecoin wallet address. Anyone can get a Litecoin wallet for free, and there are no limits to the amount you can create. Think about it like a bank account.
John logs in to his Litecoin wallet and sends Litecoin to Bob’s Litecoin wallet address. John decides to send Bob 10 Litecoins.
Once John sends the funds, they are then sent to the Litecoin blockchain.
There will be thousands of other transactions that are also going through the Litecoin blockchain. Every 2.5 minutes, a new block is created. Think about a block as a container of a transaction.
The block (or container) carries lots of different transactions, including John’s. Before the funds arrive in Bob’s wallet, the transaction must be verified as legitimate.
As Litecoin is decentralized, there is no single authority to confirm a transaction. Instead, a group of volunteers called miners use their computing power to solve really difficult puzzles. This is how transaction blocks (or, in our case, containers) are verified.
After 2.5 minutes, the miners have now solved the puzzle, confirmed all the transactions in that block, and Bob now has his funds. It’s as simple as that!
Note: When I use the term "fiat money", it basically means real-world money. USD, GBP, EUR, and YEN are all examples of fiat currencies!

Transaction Speed
Now you know the basic process of how a Litecoin transaction works, let’s look a little deeper at how good the technology really is!

So, the whole point of Litecoin was to improve on Bitcoin’s flaws, right? Well, then - how do they compare? Well, each Bitcoin block takes 10 minutes to confirm. Litecoin is 4 times faster than this, at 2.5 minutes. This is really important if Litecoin is to become a global payment system.

After 2.5 minutes, the block has 1 confirmation. This means that it can’t be reversed. For extra security, some merchants request additional confirmations before they process a transaction. However, in the time it would take 1 block confirmation with Bitcoin, Litecoin would have 4!

Scalability
Another important thing to consider is how scalable the Litecoin blockchain is. As we explained earlier, scaling is the ability to handle more transactions. However, there is always a limit to what is possible.

Bitcoin is only able to process a maximum of 7 transactions per second. Ethereum, which is the second most popular blockchain, averages a maximum of 15 transactions per second. How many do you think Litecoin can handle?

What is Litecoin: a Litecoin on a black keyboard.

Well, Litecoin is able to process a maximum of 56 transactions per second! This makes it much faster than both Bitcoin and Ethereum put together! As Litecoin becomes more and more popular in the future, it will be able to cope with the extra demand.

Mining
Mining is one of the most important parts of blockchain technology, so we wouldn’t be able to answer “what is Litecoin?” without talking about it!

Basically, mining is the process that allows people to send and receive funds without needing a third party! There are many different types of mining though, but they are each a type of consensus model.

Litecoin uses a consensus model called Proof-of-Work, or PoW for short. Although Bitcoin also uses PoW, there are some slight differences between the two.

Bitcoin use something called SHA-256 hashing.

What is Litecoin: SHA-256.

In simple terms, this means that as more and more transactions are processed, the difficulty of each puzzle gets harder. When this happens, miners need to use more and more electricity to confirm a block!

These days, Bitcoin miners need to use ASICs (Application-specific integrated circuits) hardware, which is really expensive. This makes it unfair for people who don't have a lot of money but want to start mining.

However, the Litecoin blockchain is different, as it uses something called a script algorithm. Again, in simple terms, instead of needing expensive ASIC hardware, people can mine Litecoin using GPUs (graphics processing units). GPUs are much cheaper, meaning that more people can afford to mine!

What is Litecoin? The Complete Litecoin Review

This is great for miners with less money. However, in the future, it might be possible that ASIC hardware will be used to mine Litecoin. So, when it does, it means that those who can afford expensive equipment will have more chance of receiving Litecoin mining rewards.

So, if you are looking to mine Litecoin, then start now before it’s too late!

If you have read our “what is Litecoin?” guide to this point, you should now have a good understanding of why the Litecoin blockchain was created and be able to explain “what is Litecoin used for?”.

Now, we are going to talk about Litecoin’s security features!

Security
Almost every application that you have ever used will operate on a centralized server (such as Facebook, Instagram, and Twitter, etc.). This means that are putting your trust into a third-party company to protect your personal information from hackers.

Your bank is another good example of a centralized company. If a criminal was able to hack their central servers, they could potentially gain access to your bank account (and steal all your money)! Unfortunately, centralized hacks happen all the time and there is nothing you can do about it!

That was until the creation of decentralized payment systems like Litecoin! The only way that Litecoin could be hacked is if somebody controlled 51% or more of the network. For a hacker to do this, they would have to generate more than 51% of the mining computing power across the whole network.

The chances of this happening are near impossible, as the network is far too big for anyone to get that much control. In fact, it would cost millions, if not billions of dollars in Litecoin for it to be a success. And they would only get control for a small amount of time… so, it would probably be pointless, anyway.

What is Litecoin: a Litecoin on a table.

The most important thing is how secure your Litecoin’s are. This depends on how/where you choose to store them. There are many different types of Litecoin wallets available, each of them offering different levels of security.

Think about how you would store your money in the real world. Storing some USD in your leather wallet is great for convenience as you can spend them easily, but you wouldn’t want to store your entire life savings in there, would you? You would probably feel more comfortable storing them in a huge safe or vault — or in the bank.

Well, this is very similar to how you would store your Litecoin. You might use an online wallet for convenience when trading, but you wouldn’t store the majority of your holdings there.



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