Litecoin

Litecoin (LTC) stands out as a distinguished player in the vast universe of cryptocurrencies. Litecoin was developed to overcome the limitations faced by Bitcoin and has since established itself as one of the leading digital currencies. In this article, we will delve into the world of Litecoin, its origins, how it works, and its relevance in today’s crypto market.

A key factor behind Litecoin’s popularity is its relatively fast transaction time, which makes it an appealing choice for businesses and consumers who want to leverage the benefits of blockchain without the delays associated with Bitcoin. For example, Overstock, one of the biggest online retailers, accepts payments in Litecoin. Many cryptocurrency users who want to utilize cryptocurrency for buying and selling goods and services – rather than just speculate on the value fluctuations – opt for Litetcoin.

Moreover, Litecoin’s accessibility to new miners has helped promote a more inclusive cryptocurrency environment. This accessibility, combined with its faster transaction times and large supply limit, makes Litecoin a viable digital currency for everyday transactions.

In the current crypto market, Litecoin maintains its position as a well-known and utilized cryptocurrency, but it is not (as of 2014) included among the Top Ten cryptocurrencies by market cap.

Short Facts about Litecoin

• Litecoin is a decentralized peer-to-peer cryptocurrency and open-source software project.
• Litecoin is written in C++ and released on the MIT/X11 license.
• The Litecoin main chain shares a slightly modified Bitcoin codebase.
• Compared to Bitcoin, Litecoin is known for faster transaction confirmations, lower transaction fees, and faster mining difficulty retargeting.
• The timestamping scheme is proof-of-work.
• The hash function is scrypt.
• Abbreviation / Currency code: LTC
• Sign / Unicode character: Ł
• One litecoin is divisible to eight decimal places. One millilitecoin (mŁ) is equal to 1/1000 litecoin, and millilitecoins are also known as ”lites”. One microlitecoin (μŁ) is equal to 1⁄1 000 000, and microlitecoins are also known as ”photons”. The smallest possible division is the litoshi, and one litoshi equals 1⁄100 000 000 (one hundred millionth) litecoin.
• Litecoin was developed by Charlie Lee and released on 7 October, 2011.
• The code repository is github.com/litecoin-project/litecoin.
• The block reward is halved approximately every 4 years.
• The block time is 2.5 minutes.
• The supply limit is Ł84,000,000.

How Litecoin Works: The Technical Details

Like Bitcoin, Litecoin operates on a decentralized peer-to-peer network. It is open-source and uses blockchain technology to record and validate transactions. However, several crucial differences distinguish Litecoin from Bitcoin. Here are some of the most important ones:

• Litecoin’s block generation time is significantly lower, standing at about 2.5 minutes compared to Bitcoin’s 10 minutes. This implies that Litecoin transactions are processed four times faster, increasing the speed of transactions and lowering potential bottlenecks.

• Litecoin uses the Scrypt hashing algorithm in its proof-of-work system. Unlike Bitcoin’s algorithm, Scrypt is more accessible to new miners, lessening the likelihood of mining centralization. Unlike Bitcoin’s SHA-256 algorithm, Scrypt includes a sequential memory-hard function, and therefore requires asymptotically more memory.

• Litecoin has a larger supply limit of 84 million LTC, compared to Bitcoin’s 21 million BTC. This larger supply aims to make Litecoin more suitable for everyday transactions.

Understanding Litecoin: The Origin Story

Background

Litecoin was created by Charlie Lee, a former Google engineer, in October 2011. (He would later become the engineering director of Coinbase.) Lee was inspired by Bitcoin and aimed to develop a ‘lite’ version of the popular cryptocurrency. He envisaged Litecoin to complement Bitcoin by solving some of its perceived shortcomings, such as slow transaction speed and high mining requirements. At this point in history, Bitcoin mining was largely carried out by GPUs and this mining was quite costly to set up and run.

Scrypt

The abovementioned scrypt function was not created for Litecoin; it is older than Litecoin and was developed in 2009. One notable early cryptocurrency that used scrypt was Tenebrix (TBX). Scrypt was deliberately designed to make it costly to use FPGA or ASIC chips for acceleration.

The developers of TBX included a clause in the code that permitted them to claim 7.7 million TBX for themselves at no cost, a clause that recieved quite a lot of criticism within the crypto community. Charlie Lee was one of the critics, and he developed an altnernative, but very similar, cryptocurrency called Fairbrix (FBX). Eventually, his creation Litecoin would also use scrypt, but would, unlike TBX and FBX, have a limited money supply.

The launch of Litecoin

Litecoin was released via an open-source client on GitHub on 7 October, 2011, and the Litecoin network went live on 13 October.

Litecoin was a source code fork of the Bitcoin Core client.

Examples of milestones

• During the month of November 2013, the aggregate value of Litecoin experienced massive growth, including a 24 hour period when the value increased by 100%.
• In September 2014, Dogecoin began merge-mining with Litcoin.
• In September 2021, the market price of Litecoin jumped by roughly 30% as the result of a fake press release, published on GlobeNewswire, which announced a partnership between Litecoin and Walmart.
• Purchasing a derivative of Litecoin using PayPal had been possible since 2020, but with notable restrictions. In June 2022, it finally became possible for PayPal users to transfer Litecoin from PayPal to other wallets and exchanges. This is also possible for Bitcoin, Bitcoin Cash, and Ethereum.

Increased privacy

In May 2022, a MWEB (Mimblewimble Extension Blocks) upgrade was activated on the Litecoin network (added to the base layer) as a soft fork. The MWEB feature gives users the option of increased privacy for Litecoin transaction anounts and wallet amounts.

Conclusion

In conclusion, Litecoin offers a compelling alternative to Bitcoin. While it shares many similarities with the pioneering Bitcoin cryptocurrency, its significant differences, such as faster transaction times, more accessible mining, and a larger supply limit, make it a worthy contender in the crypto market. Its sustained relevance and appeal illustrate how Litecoin has successfully carved out its niche, despite no longer being one of the major cryptocurrencies by market cap.

As the world moves towards greater digital currency adoption, Litecoin is likely to continue playing a crucial role in this paradigm shift. Whether you’re a seasoned trader or a cryptocurrency newcomer, understanding Litecoin can be an invaluable part of your digital asset knowledge base.