Litecoin (LTC) is a decentralized peer-to-peer payment system that emerged as the hard fork of Bitcoin. The payment system uses a cryptocurrency with the same name - Litecoin.
Litecoin was created by the American programmer of Chinese origin Charlie Lee in October 2011. The idea was to solve the problem of Bitcoin scalability identified by that time: low transaction speed and high transfer fee even for small payments.
The creator of Litecoin positions his brainchild not as a competitor, but as a complementing currency to Bitcoin. Litecoin is more convenient for small daily payments due to the relatively high transaction speed and minimum transfer fees.
What is the difference between Litecoin and Bitcoin?
- The process of generating new blocks is similar to how it happens in Bitcoin. But Bitcoin uses SHA-256 hash function algorithm, as Litecoin uses Scrypt algorithm;
- New Litecoin blocks are generated 4 times faster than Bitcoin ones; the average time to create a new block is 2.5 minutes.
- The maximum possible number of Litecoins is exactly 4 times more than Bitcoins - 84 000 000 (Bitcoin's maximum emission is 21 000 000 coins);
- No need to wait for transactions’ confirmation in Litecoin network; they are processed almost instantly for now. In addition, in May 2017 Litecoin updated the network and implemented SegWit protocol which allowed to further increase the speed of transactions.
The specificities of Litecoin mining
Litecoin mining is based on the Scrypt hash function which is more complex than the similar SHA-256 hash function in Bitcoin. The Scrypt hashing algorithm requires fast access to a large amount of RAM. In this regard, the equipment of higher quality is necessary to mine Litecoin. For clarity, it should be noted when mining Bitcoin GPU has an advantage over CPU 20 times, and when mining Litecoin - only 10 times.
Miner's reward for creating a new block is 25 Litecoin. But every 4 years the reward will decrease by half (as it happens in Bitcoin). In 2019 the reward will be 12.5 Litecoin.
The level of complexity of the parameters for generating a new block is re-computed 2 times a week in Litecoin network, so that the average generation time of the block remained constant - 2.5 minutes. This is done because the number of miners is not constant and the computing power of the network fluctuates.
Interesting facts about Litecoin
- Litecoin is considered “silver” in the cryptocurrency world, by analogy with Bitcoin, which is called “digital gold”.
- The first boom period of Litecoin happened in late 2013 - early 2014. Cryptocurrency skyrocketed from $2 to $42, and then returned to the previous values for a few years. The next sharp rise in the price of Litecoin happened at the end of 2017.
- In December 2017 Charlie Lee announced that he had sold and donated all his Litecoin assets, in order to avoid a conflict of interest. Previously, the general public followed all the messages of Charlie Lee’s Twitter about the cryptocurrency and accused him of manipulating the price of Litecoin.
- In September 2017, Litecoin conducted the so-called “atomic”, or cross-chain, transactions for the first time. Litecoin managed to interchange coins with several cryptocurrencies: Bitcoin, Decred, and Vertcoin directly, without the third parties.