What Is Litecoin (LTC)?
Litecoin (LTC) is an alternate cryptocurrency created in October 2011 by Charles “Charlie” Lee, a former Google engineer. Litecoin was tailored from Bitcoin’s open supply code however with a number of modifications. Like Bitcoin, Litecoin relies on an open-source world fee community that’s not managed by any central authority. Litecoin differs from Bitcoin in points like sooner block technology fee and use of Scrypt as a proof of labor scheme.
It’s thought-about to be among the many first altcoins, derived from Bitcoin’s authentic open supply code.
Initially, it was a robust competitor to Bitcoin. Nevertheless, because the cryptocurrency market has turn into far more saturated and aggressive in recent times with new choices, Litecoin’s recognition has waned considerably.
Litecoin has all the time been seen as a response to Bitcoin. The truth is, when Lee introduced the debut of Litecoin on a well-liked Bitcoin discussion board, he known as it the “lite model of Bitcoin.” For that reason, Litecoin has most of the identical options as Bitcoin, whereas additionally adapting and altering another points that the event staff felt could possibly be improved.
As of November 2021, 1 LTC is price round $215, making it the 14th-largest crypto with a market cap of just below $15 billion.
Key Takeaways
- Litecoin is an early altcoin developed by former Google engineer Charlie Lee in 2011.
- It had as soon as been known as the silver to Bitcoin’s gold, and at its peak was the third largest cryptocurrency by market cap.
- As a result of its construction is much like Bitcoin’s, it has been used as a testnet or testing floor for enhancements that later had been utilized to Bitcoin.
Understanding Litecoin (LTC)
Like different decentralized cryptocurrencies, Litecoin shouldn’t be issued by a authorities, which traditionally has been the one entity that society trusts to situation cash. As a substitute of being regulated by a central financial institution and coming off the press on the Bureau of Engraving and Printing, Litecoins are created by an elaborate cryptocurrency process known as mining, which consists of processing a listing of Litecoin transactions.
Litecoin was developed by Charlie Lee, a graduate of the Massachusetts Institute of Expertise (MIT) and a former Google engineer who turned fascinated with Bitcoin in 2011. Based on Lee, “In October of 2011, I used to be taking part in round with the Bitcoin codebase, and I suppose the wanting it was that I used to be simply attempting to create … a fork of Bitcoin. It was primarily a enjoyable facet undertaking.”
Like Bitcoin, the utmost variety of LTC is fastened. There’ll by no means be greater than 84 million Litecoins in circulation. Each 2.5 minutes, the Litecoin community generates a brand new block–a ledger entry of latest Litecoin transactions all through the world. The block is verified by mining software program and made seen to any system participant (known as a miner) who desires to see it. As soon as a miner verifies it, the following block enters the chain, which is a report of each Litecoin transaction ever made.
There are incentives for mining Litecoin: the primary miner to efficiently confirm a block is rewarded with 12.5 Litecoins. As with Bitcoin, the variety of Litecoins awarded for such a job reduces with time. In August 2019, it was halved, and the halving will proceed at common intervals till the 84,000,000th Litecoin is mined. The Litecoin Basis estimates that it will likely be round 2142 when the utmost of 84 million Litecoins might be reached.
Scrypt Proof-of-Work Algorithm
Bitcoin, Litecoin, and plenty of different cryptocurrencies use the proof-of-work (PoW) algorithm as a way to safe their networks. Principally, PoW requires that one celebration proves to all the opposite taking part events within the community {that a} required quantity of computational effort has been expended. Not like Bitcoin, which makes use of the SHA-256 PoW hashing algorithm, Litecoin makes use of the much less resource-intensive Scrypt PoW algorithm.
Scrypt is a password-based key derivation perform. Based on Tarsnip, “the scrypt key derivation perform was initially developed to be used within the Tarsnap on-line backup system and is designed to be far safer towards {hardware} brute-force assaults than different features resembling PBKDF2 or bcrypt.”
Scrypt was developed by Lee particularly to make large-scale, custom-built {hardware} assaults on the forex harder. Bitcoin’s SHA-256 algorithm doesn’t require numerous random entry reminiscence (RAM) as an obstacle to parallel processing, whereas Scrypt does.
At the start of the 2010s, as mining operations developed specialised {hardware}, just like the application-specific circuit (ASIC) to unravel SHA-256 hashing, it appeared that Bitcoin was weak to such an assault. By making Litecoin’s consensus algorithm reminiscence intensive, Lee sought to thwart the {hardware} arms race, although in follow that did not occur because the rise of GPUs answered the necessity for larger RAM.
How Is Bitcoin (BTC) Completely different From Litecoin (LTC)?
Litecoin was launched with the purpose of being the “silver” to Bitcoin’s “gold.” Like Bitcoin, Litecoin is a peer-to-peer internet currency. It’s a absolutely decentralized, open-source, world fee community. Lee developed Litecoin with the purpose to enhance on Bitcoin’s shortcomings. The broader variations between the 2 cryptocurrencies are listed within the desk beneath.
| BTC vs. LTC | ||
|---|---|---|
| Bitcoin | Litecoin | |
| Creation | 2009 | 2011 |
| Creator | Satoshi Nakamoto | Charlie Lee |
| Coin Restrict | 21 Million | 84 Million |
| Block Technology Time | 10 Minutes | 2.5 Minutes |
| Algorithm | SHA-256 | Scrypt |
| Preliminary Reward | 50 BTC | 50 LTC |
| Present Block Reward | 6.25 BTC | 12.5 LTC |
| Rewards | Halved each 210,000 blocks | Halved each 840,000 blocks |
Litecoin is designed to provide 4 instances as many blocks as Bitcoin (1 new block each 2.5 minutes to Bitcoin’s 10), and it additionally permits for 4x the coin restrict, making its essential enchantment over Bitcoin to do with pace and ease of acquisition. Nevertheless, as a result of Litecoin makes use of Scrypt (versus Bitcoin’s SHA-256) as a proof-of-work algorithm, the usage of mining {hardware} resembling ASIC miners or a GPU mining rig requires considerably extra processing energy.
Litecoin ranks within the Prime 15 largest cryptocurrencies when it comes to market capitalization (although nonetheless remaining far beneath that of Bitcoin), and as of November 2021, it had greater than 69 million cash in circulation.
$14.5 Billion
Litecoin’s market worth as of November 2021, per CoinMarketCap.
Future Plans for Litecoin (LTC)
Litecoin has carried out a number of options since its launch meant to enhance its transaction pace with out compromising the safety and integrity of the community.
SegWit
SegWit or Segregated Witness was first proposed for Bitcoin in 2015. It really works by “segregating” the digital sign knowledge (the “witness”) outdoors the bottom block within the blockchain. SegWit was developed to handle Bitcoin’s scalability situation, however the proposal created deep controversy throughout the Bitcoin neighborhood.
In 2017, Litecoin adopted SegWit, and due to Litecoin’s similarity to Bitcoin, it labored as a testing floor or testnet for SegWit’s viability on the bigger Bitcoin community. The check was a hit, and Bitcoin adopted SegWit thereafter. Some opponents of the SegWit adoption who advocated for bigger Bitcoin block sizes created a Bitcoin arduous fork that resulted in Bitcoin Cash.
Lightning Community
The Lightning Network is a second-layer know-how for bitcoin that makes use of micropayment channels to scale its blockchain’s functionality to conduct transactions.
Much like the SegWit instance, the implementation of the Lightning Community on Litecoin has been a testnet to show improvements are attainable on Bitcoin. Charlie Lee has additionally argued that when “the Bitcoin blockchain is congested and the charges are excessive, it’s straightforward to make use of Litecoin to onboard onto the Lightning Community.”
MimbleWimble
MimbleWimble is a privateness protocol that builds on confidential transactions that encrypt or obscure info like transaction quantities. It’s argued that MimbleWimble can lower blocksize and enhance scalability. Charlie Lee introduced in early 2019 that Litecoin would pursue MimbleWimble improvement, and as of 2021, improvement is underway.
What Is Litecoin and How Does It Work?
Litecoin is a peer-to-peer (P2P) digital forex, which implies it isn’t ruled by a government. Litecoin’s community affords instantaneous, near-zero price funds that may be carried out by people or establishments throughout the globe. Bitcoin, Litecoin, and plenty of different cryptocurrencies use the proof-of-work (PoW) algorithm as a way to safe their networks. Principally, PoW requires that one celebration proves to all the opposite taking part events within the community {that a} required quantity of computational effort has been expended. Not like Bitcoin, which makes use of the SHA-256 PoW hashing algorithm, Litecoin makes use of the much less resource-intensive Scrypt PoW algorithm.
What Is Litecoin Used For
Litecoin can be utilized as a P2P methodology for paying folks wherever on the earth with out an middleman having to course of the transaction. It will also be seen as a retailer of worth, or as a element of diversified crypto portfolio.
What Was LTC’s Unique Worth?
When it debuted in April 2013, 1 LTC was price round $4.30.
What Is the Highest Litecoin’s Worth Has Been?
On Might 10, 2021, LTC hit an all-time excessive of $410.26. Its all-time low of $1.15 was recorded on Jan. 14, 2015.
What Is LTC’s Halving Schedule?
Like Bitcoin, the creation of Litecoin tokens entails a course of known as mining. For taking part within the act of mining, miners are rewarded with Litecoin. A Litecoin halving refers to an occasion of halving the quantity of Litecoin rewards that miners are given for every block.
Litecoin halvings purpose to protect Litecoin’s buying energy. The final Litecoin halving occurred on August 5, 2019. On this date, the mining reward was diminished from 25 Litecoins per block to 12.5 Litecoins per block.
The following halving is predicted round August 2023.
How Many Litecoins Are There?
There’ll in the end solely be 84 million Litecoins in circulation. In November 2021, there have been simply over 69 million Litecoins in circulation. That leaves lower than 15 million LTC left to be mined.
How Can I Commerce Litecoin?
LTC is offered on most crypto exchanges (e.g., Binance, Coinbase, Gemini, FTX) towards each different cryptos like BTC & ETH, in addition to nationwide currencies like {dollars} and euros. You may also purchase LTC utilizing Robinhood and Paypal.
Investing in cryptocurrencies and different Preliminary Coin Choices (“ICOs”) is very dangerous and speculative, and this text shouldn’t be a advice by Investopedia or the author to spend money on cryptocurrencies or different ICOs. Since every particular person’s scenario is exclusive, a professional skilled ought to all the time be consulted earlier than making any monetary choices. Investopedia makes no representations or warranties as to the accuracy or timeliness of the knowledge contained herein. As of the date this text was written, the creator doesn’t personal Litecoins.
