It's important to understand how Litecoin functions by breaking it down into its components.

• Blockchain Technology: Litecoin works on a ledger decentralized that records all transactions. This ledger is maintained by a network of computers known as nodes.
• Mining: Miners add transactions to the blockchain and validate them. They receive newly-minted Litecoins in return.
• Peer to peer transactions: The Litecoin currency allows users to transfer money to each other without the need for an intermediary such as a bank.