Transferring cryptocurrency is a simple task on the user’s end. However, what happens on the blockchain is more complicated than you might think. When you transfer digital currencies, you don’t just send numbers between wallets; you also need to wait for the cryptocurrency network to validate your transaction before it is issued. For this reason, crypto wallet transfers might take some time, depending on the blockchain technology used by that particular coin.
For instance, Litecoin (LTC), although launched as a fork of Bitcoin (BTC), introduced a major technological alteration to Bitcoin’s source code in order to improve the transaction throughput time. We can say it was quite successful in its mission, which leads us to today’s question: How long do litecoin transactions take? Litecoin transaction time is only 2 minutes. However, it can take up to 8 minutes if the network is congested.
What Is Litecoin (LTC)?
Litecoin is a decentralised cryptocurrency launched by Charlie Lee during the early days of Bitcoin, on October 13, 2011. It’s a hard fork developed from the Bitcoin blockchain, which means that it uses Bitcoin’s open-source code with some major tweaks.
Litecoin was developed to offer a more efficient alternative to Bitcoin in terms of transaction speed. Plus, because it was originally made to deter specialised mining equipment like GPUs and ASIC miners, it was widely regarded as a reaction to Bitcoin’s increasingly centralised and almost monopolised farming industry.
Even though Litecoin was not the only coin that claimed to offer a newer and better infrastructure at the time, most of the altcoins that were launched during those years weren’t able to compete in the market. They either disappeared through the course of a few years or have very low trading volumes to catch the eye of an everyday crypto trader.
What made Charlie Lee and, in turn, Litecoin successful was the fact that he was able to build an online community that believes in the long-term value of the coin. This was only possible by learning from the mistakes of those coins that couldn’t make it.
What Is the Difference Between Litecoin and Bitcoin?
Litecoin was always considered to be a reaction to Bitcoin. Bitcoin is a coin whose mining process is computationally cumbersome, and it takes too much effort to validate the transactions and keep the blockchain running. Although Litecoin shares many features with Bitcoin, it also has an altered source code to make faster transactions. For this reason, when introducing his project to the public, Lee called it “a lite version of Bitcoin”, or an alternative currency to Bitcoin, like a bar of silver to Bitcoin’s gold.
What makes Litecoin different from Bitcoin is its verification algorithm, which improves its transaction time and its total mineable coin cap and the halving interval for block rewards.
As you might know, Bitcoin uses the SHA-256 hash function, while Litecoin was the first cryptocurrency to implement the scrypt algorithm, and was later followed by other cryptocurrencies such as DogeCoin (DOGE).
The algorithm doesn’t make much of a difference on the investor end. But in technical terms, scrypt is thought to be a more proper algorithm for creating a more efficient and decentralized cryptocurrency because it allows higher transaction processing and depends heavily on the empty disc space.
The total number of coins that Litecoin can produce is significantly higher than Bitcoin. Bitcoin mining will be halted at 21 million coins, while Litecoin has a cap limit of 84 million coins. The total number of minable coins doesn’t make much sense in plain text. But the supply dynamics of a given coin have serious implications over its market cap and price movements.
How Do Crypto Transactions Work?
Cryptocurrencies operate on the blockchain network using public-key cryptography to ensure the reliability of the transfers. This makes it sound like the blockchain is where the cryptocurrencies are being stored and transferred, but it’s actually a bit more complicated than that.
As the name suggests, the blockchain consists of a chain of blocks that are linked together. Every one of these blocks carries some information, i.e. the timestamp and the amount of crypto transferred through the verified transaction, the hash of the previous block and the information of the wallets. It might come to you as a surprise to hear that there is no specific information about each coin. The other information itself is what constitutes cryptocurrency.
Each user on the blockchain has their public keys and private keys. Using the private key associated with your wallet, you can cue up your transaction request on the blockchain. When the new block gets validated, your transaction will be written in it irreversibly. If the network is too congested, your request will go to the mempool until the miners pick it up.
How Does the Proof of Work Consensus Mechanism Work?
PoW is the most widely known and popular blockchain protocol, thanks to Bitcoin. It was the first consensus mechanism used to generate cryptocurrencies. After Bitcoin’s success, more intellectual and physical capital was directed to the area of cryptocurrencies and other consensus mechanisms like Proof of Stake (PoS), Proof of Capacity (PoC), the Ripple Protocol Consensus Algorithm (RPCA) and many others were designed.
The Proof of Work algorithm takes its name from the computational workload. Generating any hash is a trivial task for any computer. But there is a difficulty level to each hash that only allows the nodes to produce a new block approximately every 10 minutes. Every node competes over the hash solution. The first one to come up with a fitting hash adds the next block to the blockchain. In the process, miners generate new coins and earn a block prize for their effort.
As the computational power assigned to mine coins on PoW blockchains increases, the difficulty of the hash increases proportionally. This means it doesn’t matter how much processing power we assign to mining, the amount we mine doesn’t change. However, because of the intense competition over cryptocurrencies, coins based on the PoW procedure currently consume an immoderate amount of electricity.
What Is a Hash Function?
A hash is a mathematical function that converts an input into a fixed-sized small output. Scrypt and SHA-256 are two of the most popular hash functions, but there are other ones like IOTA’s (IOTA) Curl and Ethereum’s (ETH) Keccak-256.
Hash functions work only one way, meaning you cannot match the given output to the corresponding input. You can only check if the output matches the input you have. You can think of hash functions as coffee grinders. Coffee beans go in, and coffee powder comes out. But you can’t get the beans from the powder you got. This feature may sound like a technical detail, but it is essential to keeping the blockchain ledger safe and sound.
A hash is essentially a complex mathematical problem and is used in multiple parts of the blockchain. First, each block contains the previous block’s hash value, ensuring that the blockchain ledger hasn’t been tampered with. Next, as part of the PoW procedure, miners continuously try to come up with a matching output that contains a series of leading zeros by generating hashes from random strings. This is the way miners prove their work. Even though the validation is essentially a random process, the one with the higher hashing power always has a higher chance of hitting the solution.
What Is the Difference Between SHA-256 and Scrypt?
Without getting into their cryptographic details, the major difference between these two is that SHA-256 is a more complicated algorithm than scrypt. Mining coins with SHA-256 typically requires hash rates around GH/s level, if not higher. This complexity results in slower transaction turnaround times. On the other hand, scrypt is a quicker and easier algorithm compared to SHA-256. Plus, for small transactions, Litecoin integrates the Lightning Network, which is an additional layer on top of its main blockchain.
Because most of the ASIC miners were specifically designed and programmed to mine on the SHA-256 algorithm, the huge mining farms weren’t to be appropriated to mine Litecoin. On the other hand, scrypt was successful in deterring GPUs and ASIC miners at the beginning but in time, scrypt-capable ASICs emerged and dominated the industry just like they did in Bitcoin mining.
What Is Lightning Network?
Lightning Network is an upgrade on the blockchain technology that was initially proposed for Bitcoin in 2015. Because Bitcoin has limitations on the transaction capacity during a particularly busy period, the transactions can get slower and more expensive.
Because the predetermined time frame of the block validations is 10 minutes, Bitcoin in its current form can become insufficient to meet higher demand on the network activity. To put it in perspective, the number of Bitcoin transactions its blockchain can support in a second is only 7, while VISA can support up to 65,000 transactions per second. With additional technical updates, Bitcoin’s transaction capacity can be increased up to two digits, but it still wouldn’t be enough to implement cryptocurrency as a universal payment method. This is called the scalability problem, and it is one of the main arguments against the idea of Bitcoin as a global medium of exchange.
Lightning Network is a set of rules that are built on top of the Bitcoin network and is specifically designed to handle smaller transactions to ease the overload on the blockchain during busy hours. The main idea is that we don’t need to record the small transactions on the main ledger, creating a separate one for them. You can think of it as a separate unique peer-to-peer ledger between agents, on top of the main blockchain of Bitcoin.
At first, miners denied implementing it on Bitcoin, but Litecoin accepted to utilise it. The first LN transaction on Litecoin was made on May 10, 2017. A microscopic payment was successfully sent through LN in a fraction of a second, which was not possible nor feasible on the Litecoin network before.
How Long Does Litecoin Take to Send
A cryptocurrency transaction is validated when a new block is generated by one of the nodes in the blockchain. On the Litecoin network, unless you are using the Lightning Network that’s only applicable on small transactions, a new block is generated every 2 minutes. Thus, a Litecoin transaction can be completed in only 2 minutes.
However, depending on the network congestion, a litecoin transaction time can take up to 8 minutes if there is a long queue of transactions waiting to be processed. If you want to check the network load before sending your Litecoin, you can use lots of online tools, such as Block Explorer, Blockchain Explorer or BTC.com. If your transfer is taking too long, the network congestion is probably at its peak. Unfortunately, there is not much you can do about it other than wait.
Frequently Asked Questions
A Few Words Before You Go…
Litecoin was developed to be a fast, secure and valuable cryptocurrency, and it was quite successful on this mission. However, even though Litecoin incorporates LN, it is not the fastest cryptocurrency today. For example, you can transact Nano (NANO) in less than a second with incredibly low transaction fees.
In fact, since the recent developments in blockchain technology, such as Lightning Network or Segregated Witness, the scalability problem of cryptocurrencies is slowly dissolving. Although Bitcoin hasn’t implemented such an upgrade yet, there are many alternative altcoins that can be used to securely and economically transfer digital assets. For this reason, even though Litecoin was an important innovative coin that has contributed to the development of cryptocurrency technology, today it doesn’t have a particularly special perk other than being a well-proven cryptocurrency and store of value.