New Listings

What is Litecoin (LTC)?

Beginner

2022-11-22 | 5m

You all know what Bitcoin is. (If not, go and check out our ultimate guide to Bitcoin now) But what if I tell you there is another coin that’s just like Bitcoin but much faster and cheaper? I know there are an ever-growing number of altcoins claiming the same thing, but today, we are going to talk about one of the largest among them - Litecoin (LTC).

What is Litecoin (LTC)?

Bitcoin is epoch-making. It bred a multi-billion dollar industry and changed the way we perceive finance forever. Bitcoin is also clunky. People shy away from its long transaction time and costly transaction fees. Created from a fork of Bitcoin in 2011, Litecoin was designed to enable instant, near-zero-cost payments to everyone in the world. Like Bitcoin, Litecoin runs on thousands of nodes around the world and is not governed by any central authority. Litecoin is as much an upgrade as it is a compliment to Bitcoin. Charlie Lee, the creator of Litecoin, proclaimed it as ‘silver to Bitcoin’s gold’ during an interview in 2017. Regarding the creator of Litecoin, he is an MIT graduate and former Google engineer, Charlie Lee. Lee invented Litecoin as “mainly a fun side project” and got a job at Coinbase not long after. However, in 2017, he quit Coinbase to work on Litecoin full-time.

How does Litecoin work?

Litecoin uses Proof of Work (PoW) consensus but with a different algorithm - scrypt, shared by the famed meme coin, Dogecoin (DOGE). Similar to Bitcoin, Litecoin has a total supply of 84 million and has a halving mechanism that cuts miners’ rewards by half every 840,000 blocks.

With its similarities to Bitcoin, Litecoin is also favoured by developers to test different kinds of technologies and upgrades for Bitcoin. For example, Segregated Witness (SegWit), proposed to increase Bitcoin’s transaction speed by increasing its block size limit, was first introduced to Litecoin in May 2017, 3 months before its implementation on the Bitcoin blockchain.

Smart contracts, custom tokens, and NFTs are also available on the Litecoin blockchain with its newly-added second-layer solution OmniLite. In May 2022, Litecoin deployed the Mimblewimble protocol. This upgrade introduced better anonymity, fungibility, and scalability, as well as potentially doubled Litecoin’s transactions per second.

How is Litecoin different from Bitcoin?

Litecoin was designed to facilitate faster transactions. The average block time and the average transaction confirmation time of Litecoin are 2.5 minutes compared to Bitcoin’s 10 minutes. Litecoin is able to process around 50 transactions per second, a huge improvement over Bitcoin’s 7. Transaction fees are also much cheaper on the Litecoin blockchain, most of the time lower than US$0.01. Bitcoin’s transaction fee, on the other hand, looks like a rip-off at around US$0.5.

With the scrypt algorithm, Litecoin also intended to make mining accessible to average hobbyists, as mining Bitcoin has become more and more like a tooth-and-nail fight with heavy, loud application-specific integrated circuits (ASICs). However, scrypt ASIC miners have already been developed, and although it is still technically possible to mine LTC with consumer-grade hardware, most LTCs are mined by ASICs today. You can also merge mine DOGE together with LTC since they share the same algorithm.

Litecoin Resources

Whitepaper

Website