Basic Litecoin Transaction explained

When I trade (i.e 2 LTC) the transaction goes thru.

However, when I look at the transaction record, my wallet address is either an input or output (depending on whether sent or recieved) along with other “random?” inputs or outputs. Also the total amount of the transaction is 160LTC, and my 2 LTC is just a small piece of the total transaction associated with my wallet address.

It is my understanding that this is a property LTC has created for their transactions to help with privacy and cut down fees.

I also assumed that these other addresses and my own, are operating as multsig addresses (aka as keys) to confirm a transaction. Is this true? Would LTC characterize the multiple input and outputs of a single transaction as "multisig’? Or is this just a basic transaction that groups together other wallets and users who need to be a part of a transaction, and is specfic to litecoin?

Thank you for your help!

Basic Litecoin transaction works exactly the same as a basic Bitcoin transaction. From your description I assume that you are sending the transaction either from an exchange, or from a wallet that manages your utxos for you, for example a Ledger hardware wallet with its computer software. If you have a large utxo, e.g. 160 LTC, then it might want to break it up. I don’t really know the wallet algorithms for managing utxos.

I see, thank you for that information. In this specific instance, I am transferring from one exchange (Binance) to another (Gemini). My Binance address is seen as an input and the amount correlated to it is, 2.3 LTC. However, the entire transaction is 160 LTC. I do not own 160 LTC. Are these other inputs, that add up to 160 LTC, other derived wallets that Binance manages? Where are these other inputs coming from? They are not mine and I have never owned more than 2.3 LTC, so why are these other inputs and outputs involved in my transaction. If I use an exchange, is my wallet - really not my wallet? and just an derived address of a wallet managed by binance?

Thanks again for the help!

Exchanges batch send, so it combines your coins with others when sending into a single transaction. This is typically done to save on fees.

Bingo. Exchange wallets are almost always “custodial”, meaning they manage the keys. If the exchange holding your funds went bankrupt (see Mt Gox), you won’t be able to recover those coins without a lengthy legal process. We have a saying in crypto “Not your keys, not your coins” meaning if you don’t control the keys, then you aren’t really in control of the coins.

Your best bet is to buy a hardware wallet (like a ledger), and withdraw your coins from the exchanges they’re on, and only send them to an exchange if/when you want to sell them.

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