Different cryptocurrencies use different mechanisms to maintain their value in the market. One way to do this is to either be inflationary or deflationary.
What about Litecoin? Which mechanism does it use? Let’s find out below.
Is Litecoin Inflationary?
No. Litecoin isn’t inflationary.
Litecoin is deflationary because it has a hard cap on its coin supply. So, at any point, the number of LTC coins in circulation will never exceed 84,000,000.
Production of LTC coins continues to slow as the token halves, and the mining difficulty increases every four years. The halving process complicates how fast computers can solve mathematical puzzles before a new LTC exists.
Ultimately, if Litecoin reaches its maximum coin supply cap, the token will maintain its deflationary feature by increasing in value.
Are All Crypto Inflationary?
Not all cryptocurrencies are inflationary.
In the crypto industry, you’ll find coins with varying models. Because every crypto has unique features, not all cryptocurrencies use an inflationary mechanism.
Coins fall into three categories: inflationary, deflationary, and those that experience both.
Inflationary crypto periodically increases its coins supply in the market. Such cryptocurrencies have no cap on their coin supply and may lose value over time.
An excellent example of an inflationary coin is Dogecoin — where removing the 100 billion cap on its coin supply exposed it to an extreme price drop.
Deflationary cryptos have a fixed limit of coin supply or slowly increase coin supply until they reach the limit. Such cryptos may increase in value once they hit the limit since the demand now outgrows supply in the long term. Litecoin is an excellent example, as explained above.
Also, some cryptocurrencies will employ inflationary or deflationary mechanisms to protect their value. For example, a coin like Hydra has both mechanisms.
Is Litecoin A Store Of Value?
Yes. Litecoin is a store of value.
You can add Litecoin to your investment portfolio and let your investment grow with time. Of course, as with any investment, there will be price fluctuations. But the long-term payout will be handsome.
How Many Litecoins Are Left?
There are fewer than 14 million Litecoins left to mine.
Today, with the supply cap intended for 84,000,000 LTC, a total of 70,853,418 LTC are in circulation and 13,146,582 LTC remaining.
Since participants mine a block of 12.5 LTC every 2.5 minutes and the upcoming halving process, there’s a continuous increase of LTC in circulation.
Can Litecoin Be Mined?
Yes. You can mine Litecoin.
Litecoin is among the easiest coins to mine in the market. Since Litecoin runs the less energy-intensive scrypt algorithm, anyone with a home computer can mine Litecoin. However, ASICs computers will get you better returns than a home computer.
With the right equipment and procedure, almost anyone with basic blockchain knowledge can do it.
So, how can you mine a Litecoin?
Here are steps to follow to begin mining Litecoin.
Find Appropriate Mining Hardware
To make mining a profitable venture, you need specialized mining rigs. As more computers join the LItecoin network, there is a continuous increase in the difficulty of mining.
Standard computers aren’t ideal for mining Litecoin. You need heavy-duty Application-Specific Integrated Circuits (ASICs) created to focus on solving complex mathematical puzzles.
Learn more: Can You Mine Litecoin With GPU?
Download Mining Software
You need specialized software to connect to the Litecoin network. Today, you can find multiple free and open-source software versions to help with the mining process.
While some offer basic user interfaces, others provide tailored settings and can mine more than just Litecoin.
Select and join a mining pool
Mining Litecoin can be done using pools. You can join a mining pool to benefit from the combined power of multiple mining rigs and earn better rewards . Mining pools ensure you get consistent rewards over time.
Joining a pool has membership fees attached, but it’s worth it.
Once you’re part of your preferred mining pool, you should now connect your hardware to a power source and set up your Litecoin mining software. Also, don’t forget to register your crypto-wallet with the pool to receive your rewards once you qualify.
Also read: 3 Best Mining Pools For KDA (Guide)
Can Litecoin Surpass Bitcoin?
At the moment, Litecoin must do a lot to beat Bitcoin. However, as Litecoin adopts new ideas and technologies, it may beat Bitcoin in the future.
Here are some reasons for that:
Change to Proof of Stake consensus
Litecoin can surpass Bitcoin by changing from a Proof of Work to a Proof of Stake consensus mechanism. The proof of Stake model is faster, more scalable and would attract more investment in Litecoin.
Introduction of Layer-2 Solutions
Introducing layer-2 solutions on the Litecoin network is another way of beating Bitcoin. Layer-2 solutions will increase adoption of the Litecoin network as developers and users will want to use dApps and services on a cheaper blockchain.
Learn more: Is Litecoin Layer 1?
Transaction Speeds and Block Time
Litecoin completes a 1 LTC production in 2.5 minutes or less compared to Bitcoin. It also boasts 56 TPS for its payment application.
Bitcoin’s fastest block time is 10 minutes, and transaction speeds of 5TPS. Even after the halving process, Litecoin still has higher transaction speeds and block production time.
Is Bitcoin Better Than Litecoin?
Litecoin and Bitcoin will offer different pros depending on your needs as an investor. If you seek a partner for payments and speedy transactions, Litecoin is your partner.
Yet, if you want crypto that provides the best store of value, Bitcoin has the best market price of any crypto in the market.
Learn more: Is Litecoin Faster Than Bitcoin (Compared)
Litecoin is deflationary. It has a coin supply limit that helps it maintain its value in the market. It has a limit of 84 million coins, with just under 12 million coins left to mine. Once it hits its cap, the value of Litecoin will remain the same or increase depending on market forces.