Digital currency platform Coinbase has added support for its third cryptocurrency, Litecoin.
Coinbase, headquartered in San Francisco, acts as a ‘wallet’ and trading exchange for digital currencies. Originally focused on Bitcoin, the world’s first cryptocurrency, it added a second currency, ethereum, to the platform in 2016.
The company has now added support for Litecoin – launched by Coinbase director Charles Lee in 2012 as a rival to Bitcoin.
Litecoin is seen by some as a dark horse to take the overspill if Bitcoin gets to a technically unmanageable size.
All three cryptocurrencies make use of what is called distributed ledge technology, or ‘blockchain’ – a database in the cloud that is continuously updated and certified. Each new transaction creates a new block of data that is permanently locked and cannot be tampered with.
New currency is generated by ‘mining’ – a complex, maths-based process in which individuals and teams around the globe compete to solve a complex mathematical problem designed to verify currency transactions.
The winner is rewarded with a new issue of currency. The work and reward involved give the currency an intrinsic financial value, while at the same time keeping the process secure and transparent.
Litecoin claims to feature faster transaction confirmation times and improved storage efficiency than Bitcoin, which some experts claim has technical limitations that could slow its growth.
Litecoin has a market capitalization of $1.1 billion, with nearly 51 million litecoins in circulation, compared with Bitcoin’s market cap of $25 billion and 16.3 million bitcoins in circulation.