Public interest in cryptocurrencies and distributed ledger technology has seen “Hockey Stick” style growth over the past few years. The main cryptocurrency focus has always been Bitcoin. And rightfully so, as it dominates over 52% of the total market share at the time of writing this article.
Since Bitcoin’s inception, many other cryptocurrencies have entered the scene. One of the most popular alternatives to Bitcoin is Litecoin, coin abbreviation LTC. LTC is sometimes referred to as the “silver” to Bitcoin’s “gold.” Even the founder, Charlie Lee, uses the Twitter handle @SatoshiLite. An homage to Satoshi Nakamoto, the anonymous alias of the creator of Bitcoin.
In this article, I will explain in simple terms, what is Litecoin? I will also look at some of the similarities and differences between Litecoin and Bitcoin.
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- Litecoin Basics
- Litecoin History
- Litecoin vs. Bitcoin (LTC vs BTC)
- LTC Fun Facts
- Litecoin Availability
Basics of Litecoin
What is Litecoin? And how is Litecoin different than Bitcoin? Litecoin is a peer-to-peer digital currency that enables near-instant payments to anyone in the world with almost zero fees. This is similar to what a lot of other coins offer, the peer-to-peer version of digital cash.
Like Bitcoin, Litecoin is an open-source software project. It is well documented that Bitcoin inspired the creation of Litecoin, and technically speaking the projects are very similar. However, the two currencies do have a few differences, 3 of which will be the basis of discussion for this article.
When was Litecoin Created
Who Created Litecoin?
As I mentioned in the intro, the founder of Litecoin is not anonymous like with Bitcoin. Litecoin was founded by Charlie Lee while he was working as an engineer at Google. In 2013, Lee left Google and joined Coinbase, as Director of Engineering and one of the first employees. Lee helped Coinbase grow into one of the most popular digital currency wallets available today. However, in 2017 Charlie left his role at Coinbase to turn 100% of his focus to the Litecoin project. Lee has also sold and donated the majority of his Litecoin holdings. This was done to avoid any possible conflict of interest that could arise from his influence and position as Founder of the company.
LTC vs BTC
As mentioned, Litecoin is very similar to Bitcoin. Both use the consensus algorithm Proof of Work. To learn more about Proof of Work as a consensus mechanism to solve the Byzantine Generals Problem, check out this Deep Dive.
How are Litecoin and Bitcoin Different
Let’s take a look at 3 ways that Litecoin is different than Bitcoin. Understanding their differences will highlight what makes this cryptocurrency unique.
The first thing to know is that Litecoin processes a block every 2.5 minutes. This is a tremendous improvement over the Bitcoin network that mines a new block about every 10 minutes. This improvement means that transactions on the LTC network are faster than with Bitcoin.
The second difference is LTC uses a Scrypt algorithm, this is different than Bitcoin which uses SHA-256. This article won’t get too in depth on the difference in the hashing algorithms.
At a high level, there are a couple of reasons that a Scrypt algorithm was chosen over SHA-256. One reason is that a scrypt algorithm requires memory resources, and does not solely rely on hashing power. Scrypt mining was designed to be less susceptible to the kinds of custom hardware solutions employed in ASIC-based mining. However, with the increase of the price in LTC there are now ASIC Litecoin miners.
Again this article is not about mining, but in simple terms, an ASIC miner is a machine programmed to do 1 task a very high rate of speed. The problem with ASIC mining is it has lead to mining pools and a decrease in the centralization of Proof of Work coins.
Additionally, by using a different algorithm than Bitcoin, Litecoin relies on a different set of miners than Bitcoin and they do not compete for miners.
The third thing to consider is the total supply of the currency. The total amount of Litecoins that will ever exist is 84 Million. Bitcoins total supply will be 21 Million Bitcoins. The reason that the supply is 4 times larger is to take into account the 4 times faster rate of transaction confirmation.
Like Bitcoin, Litecoin can be divided up to 8 decimal places. Also similar to Bitcoin, the block reward for miners in Litecoin reduces by half at a specific block number. With LTC this happens every 840,000 blocks, which equates to about every 4 years. The next halving will reduce the block reward from 25 Litecoins to 12.5 Litecoins. This reduction is will occur on or around August 8th, 2019.
Fun Facts about LTC, at the time of publishing:
Total Litecoins in circulation: 60,247,075
Total Litecoins to be Created: 84,000,000
Percentage of total Litecoins mined: 71.72%
Total Litecoins left to mine: 23,752,925
LTC price: $30.80
Market capitalization: $1,855,796,675.93
Litecoins generated per day: 14,400
Total blocks: 1,569,883
Blocks until mining reward is halved: 110,117
Approximate block generation time: 2.5 minutes
Approximate blocks generated per day: 576
Now I See the Lite
I feel by now you have a good understanding of how LTC works, and how it compares with Bitcoin. The main improvement Litecoin introduces over Bitcoin is transaction speed. The increased transaction speed makes it more ideal as a digital payment solution. Additionally, LTC will also use the Lightning network for additional scalability. You can read more about the Lightning Network here.
According to founder Charlie Lee, the next goal is to make Litecoin more F