What is Litecoin (LTC)?
Litecoin (LTC) is an alternative cryptocurrency created in October 2011 by former Google engineer Charles “Charlie” Lee. It was adapted from Bitcoin’s open source code, but with some changes. Like Bitcoin, Litecoin is based on an open source global payments network that is not controlled by a central authority. Litecoin differs from Bitcoin in several ways, including faster block generation speed and the use of Scrypt (pronounced “escript”) as its hashing algorithm.
Important points
Litecoin is an early altcoin developed in 2011 by former Google engineer Charlie Lee. Dubbed the “silver equivalent of Bitcoin’s gold,” at its peak it was the third-largest cryptocurrency by market capitalization. Because its structure is similar to Bitcoin, it has been used as a testnet or testing ground for improvements that were later applied to Bitcoin.
History of Litecoin (LTC)
Litecoin is believed to be one of the first altcoins derived from Bitcoin’s original open source code. Initially, it was a strong competitor to Bitcoin. However, as the cryptocurrency market becomes saturated and competition intensifies, Litecoin’s popularity has waned somewhat.
Litecoin was developed by Charlie Lee, a Massachusetts Institute of Technology (MIT) graduate and former Google engineer who became interested in Bitcoin in 2011. According to Lee, “In October 2011, I was tinkering with the Bitcoin codebase. I guess I was just trying to make a fork of Bitcoin. It was mostly a fun side project. It was.”
Litecoin has always been seen as a reaction to Bitcoin. In fact, when creator Charlie Lee announced Litecoin’s debut on a popular Bitcoin forum, he called it a “lite version of Bitcoin.” Although Litecoin has many of the same features as Bitcoin, Lee also adapted and changed several other aspects that the development team felt could be improved.
$6.02 billion
Litecoin market value as of May 5, 2024, according to CoinMarketCap.
segwit
Segregated Witness (Segwit) was first proposed for Bitcoin in 2015. It works by “separating” digital signal data (“witnesses”) outside of the blockchain’s base blocks. SegWit was developed to address Bitcoin’s scalability issues by giving blocks more room to store information, but the proposal sparked deep controversy within the community.
In 2017, Litecoin adopted SegWit. Because of Litecoin’s similarities to Bitcoin, it served as a testing ground for the viability of SegWit on the larger Bitcoin network. The test was successful and Bitcoin subsequently adopted SegWit. Some people who opposed the adoption of SegWit and advocated for larger Bitcoin block sizes created the Bitcoin hard fork that resulted in Bitcoin Cash.
lightning network
The Lightning Network is Bitcoin’s second layer technology that extends the blockchain’s transaction execution capabilities using micropayment channels.
Similar to the SegWit example, the implementation of the Lightning Network in Litecoin was a test to prove that innovation is possible in Bitcoin as well. Charlie Lee also claimed that “if the Bitcoin blockchain is congested and fees are high, it would be easy to use Litecoin to onboard to the Lightning Network.” Litecoin integrated the Lightning Network in 2018.
mimblewimble
According to the Litecoin website, the last planned project (as of May 5, 2024), Mimblewimble, was completed in May 2022.
MimbleWimble is a privacy protocol built on confidential transactions that encrypt or hide information such as transaction amounts.
How to mine Litecoin
Litecoin is a mineable cryptocurrency. It can be mined using an application specific integrated circuit (ASIC) or a personal computer (in limited capacity). If you choose to mine Litecoin, we recommend joining a mining pool, even if you can afford a Scrypt-compatible ASIC. Mining pools increase the chances of earning rewards, but the rewards are shared with the members of the pool.
Litecoin (LTC) vs Bitcoin (BTC)
Litecoin was launched as a cryptocurrency used for small-value transactions. Like Bitcoin, it is a peer-to-peer digital currency. It is a fully decentralized, open source, global payments network. Lee also developed Litecoin to improve on Bitcoin’s shortcomings. The extensive differences between the two cryptocurrencies are shown in the table below.
BTC and LTC Bitcoin Litecoin creation 2009 2011 Creator Satoshi Nakamoto Charlie Lee Coin limit 21 million 84 million Block generation time 10 minutes 2.5 minutes Algorithm SHA-256 Crypto Initial reward 50 BTC 50 LTC Current block reward 3.125 BTC 6.25 LTC reward is halved every 210,000 blocks 840,000 blocks halved every block Final reward (estimated) 2140 2142
Litecoin is designed to generate 4 times as many blocks as Bitcoin (1 new block every 2.5 minutes compared to Bitcoin’s 10), and the coin limit can also be 4 times as large, so The main attraction is speed and ease of acquisition.
Scrypt and Litecoin PoW require significantly more processing power than SHA-256 and Bitcoin PoW. However, Litecoin generates tokens four times faster than Bitcoin and has a smaller network, so it uses less energy to generate block rewards (at least in May 2024).
Litecoin ranks among the top 20 cryptocurrencies in terms of market capitalization (although it is still far below Bitcoin). As of May 2024, there are over 74 million coins in circulation.
Scrypt’s Proof-of-Work Algorithm
Bitcoin and Litecoin both use proof of work (PoW). Essentially, PoW requires one party to prove to all other participants in the network that the required amount of computation has been spent. Unlike Bitcoin, which uses the SHA-256 PoW hashing algorithm, Litecoin uses the less resource-intensive Scrypt hashing algorithm.
Scrypt is a password-based key derivation function. According to Tarsnap, “The cryptographic key derivation feature was originally developed for use in the Tarsnap online backup system and is designed to be much more secure against hardware brute force attacks than alternatives such as PBKDF2 and bcrypt. Masu.”
Lee used Scrypt to make large-scale custom hardware attacks against currencies more difficult. Bitcoin’s SHA-256 algorithm does not require large amounts of random access memory (RAM), which is an obstacle to parallelism, whereas Scrypt does.
In the early 2010s, Bitcoin appeared to be vulnerable to such attacks as mining operations developed specialized hardware such as application-specific circuits (ASICs) to resolve SHA-256 hashes. Ta. Lee tried to stop a hardware arms race by making Litecoin’s consensus algorithm more memory-intensive, but that didn’t actually happen because ASIC designers found a way to create Scrypt miners. did.
The future of litecoin
As of May 2024, there were no projects listed on Litecoin’s website or GitHub page. However, that doesn’t mean there are no plans. The Litecoin Foundation’s Github page displays LiteWallet activity for Android and iOS, as well as other projects not related to the Litecoin core blockchain or network.
If the past is any indicator, Litecoin will continue to be developed and maintained. Its founder sees a future in which there are only a few cryptocurrencies left, and he predicts that Litecoin will be one of them.
Does Litecoin have a future?
Litecoin is the second oldest cryptocurrency and sees its share of cryptocurrencies in winter and summer. This does not mean it will last, but it is a sign of staying power.
What will Litecoin be worth in 5 years?
Cryptocurrency prices fluctuate based on news, geographic and economic events, hype, regulatory announcements and actions, and more. The future price of Litecoin cannot be predicted as there are too many factors that influence it.
Is Litecoin investment legal?
Investing in Litecoin is legal. It can be mined or bought and sold on exchanges. Whether you invest in it or not depends on your financial situation and the future prospects of Litecoin. A financial advisor can help you decide if it’s a good fit for your portfolio.
conclusion
Litecoin is a cryptocurrency created from a fork of the Bitcoin blockchain, but with some changes. It is faster than Bitcoin, has more coins available, and uses a different hashing algorithm than Bitcoin.
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