he Litecoin blockchain, like Bitcoin, has become more and more popular as a valuable coin choice among cryptocurrency enthusiasts. Litecoin (LTC) is similar to Bitcoin, but there are important differences that make Litecoin more usable.
Litecoin is the brainchild of Charlie Lee, a computer scientist who worked at Google. After growing interest in cryptocurrency, Lee envisioned a lighter version of bitcoin. A “lite”coin that would democratize mining and be accessible for the everyday merchant while still being a decentralized blockchain. With that in mind, Charlie Lee launched Litecoin via open sourced client on Github on October 7, 2011.
Litecoin was created off a fork of the Bitcoin Core with differences in algorithm, number of coins available, and block generation time. All these slight changes created a coin that was made for high transaction volumes.
Starting with the algorithm, both Bitcoin and Litecoin use proof-of-work consensus mechanism to confirm transactions. Bitcoin uses SHA-256, whereas Litecoin uses Scrypt, a newer algorithm that’s less complicated. SHA-256 algorithm although more complicated allows miners to create custom mining hardware solutions (powerful computers) for ASIC-based mining.
While Litecoin’s Scrypt based algorithm is designed against ASICs. Therefore it’s accessible for users to be miners. Although companies have come up with Scrypt ASICs, they haven’t made significant change for Litecoin miners. Litecoin’s mining accessibility for all has become one of its best characteristics.
Because of how accessible mining is for Litecoin, the block generation time is faster. That means Litecoin’s transaction confirmation speed is faster. It’s at approximately 2.5 minutes. By contrast, Bitcoin’s transaction confirmation speed can be more than 10 minutes depending on traffic.
This makes Litecoin the perfect small purchase coin. It allows merchants to run faster transactions and have many of them confirmed very quickly. Bitcoin merchants would have to wait at least 4x longer.
That’s a major difference in wait time and a major disadvantage for merchants. Since there’s faster block creation time, it allows more miners to mine for rewards, making it more democratized than bitcoin.
The only concern is that Litecoin can easily create orphan blocks--blocks made by 2 or more miners at the same time--which can cause strain since only 1 block can be accepted. The other miners’ blocks will be rejected and no reward will be given. Litecoin has since released an update wtih Segwit (also embraced by bitcoin) to decrease the impact of orphan blocks.
Although bitcoin have been compared to gold in the cryptocurrency world, Litecoin is generally seen as the silver. It’s a functional alternative to Bitcoin and its value has seen a major climb since the release.
Another one of Litecoin’s distinguishing characteristics is the total number of coins available for mining--84 million coins. On the other hand, Bitcoin has 21 million. That means Litecoin’s distribution can be more liberal and readily available as opposed to Bitcoin, which tends to be hoarded for value. Litecoin has a fairer distribution of coins because of its high availability.
Litecoin has been able to tread the cryptocurrency market with notable growth since its release, especially in December 2017. It’s one of the top 5 most traded coins and top 10 in market cap value.
Litecoin has shown strong growth and better recovery than bitcoin although being almost identical. Its faltering characteristic is that Litecoin’s unique improvements on bitcoin’s algorithm is being embraced by many other coins on the market, making it less unique.
Litecoin’s credibility has plunged since Lee sold all his LTC holdings citing a conflict of interest while working at Coinbase. Additionally, the anticipated Litepay service is now dropped. Despite this, Litecoin is still strong in the market. It’s up to you to decide if Lee’s separation from Litecoin is adverse or advantageous.
You can buy Litecoin at these cryptocurrency exchanges: Coinberry, Bitbuy, Kraken, Coinsquare, NDAX, binance, BC Bitcoin, Quebex, Coinmama, and Coinbase.
Like what you read? Check out our Beginner Guide to Bakkt.