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What is Litecoin?
Litecoin is a global, decentralised, peer-to-peer payment network built on Bitcoin’s source code, with a native currency of the same name (Litecoin, ticker LTC).
It was launched in October 2011 by its creator and developer, Charlie Lee, who sought to improve the first cryptocurrency by using a different mining algorithm and shortening transaction-confirmation times. The code of this “digital silver” project was released under the permissive MIT/X11 licence, allowing it to be modified, copied and redistributed in altered form.
Recently, Lee said in an interview that he started Litecoin “just to have fun” and did not expect it to succeed. He considers it slightly less secure and decentralised than Bitcoin, yet attractive thanks to lower fees, high speed and greater network throughput. Lee believes Bitcoin will increasingly be seen as a store of value, with Litecoin used for small payments.
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How does Litecoin differ from Bitcoin?
In essence, Litecoin is a fork of Bitcoin. Its lighter-weight network allows transactions to be confirmed four times faster than on Bitcoin’s blockchain. Both systems use the proof-of-work (PoW) consensus mechanism, but Bitcoin employs the SHA-256 hashing algorithm, whereas Litecoin uses Scrypt, which requires more RAM but is easier to set up.
Bitcoin’s supply is capped at 21m coins; Litecoin’s at 84m. A Bitcoin address has 26–35 characters and starts with the digit 1 or 3, while a Litecoin address consists of 33 characters, is derived from a public key using SHA-256 hashing, and begins with the letter L or the digit 3 (after SegWit activation in 2017, this second type began with the letter M).
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How to buy Litecoin?
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What is Litecoin mining difficulty?
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How to mine Litecoin?
Until 2014, when Chinese mining giant Bitmain introduced an ASIC miner for the Scrypt algorithm, Litecoins could be mined with central (CPU) and graphics (GPU) processors. LTC can be mined using the project’s official wallet or specialised Scrypt-based software.
Given that the computational difficulty is higher than when mining Bitcoin and that rewards for miners have recently fallen, earning money from Litecoin mining today is extremely difficult without a specialised farm.
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What is the Litecoin halving?
In early August 2019, at block 1,680,000, the Litecoin network underwent its second halving—cutting the block reward from 25 LTC to 12.5 LTC. As Charlie Lee explained, this should prevent LTC’s price from turning down.
The next such reduction is planned for August 2023.
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Who develops the Litecoin network?
In the early days, all work on developing the Litecoin network was done by its creator, Charlie Lee. At the same time he worked at Google and, from 2013, at the American cryptocurrency exchange Coinbase, devoting himself fully to the project only from the summer of 2017.
That year he created the non-profit Litecoin Foundation in Singapore and became its managing director, sharing board seats with developer and crypto investor Xinxi Wang, British developer Franklin Richards and project manager Zing Yang. The Litecoin Foundation financially supports the Litecoin Core developer team, which includes project developers and several Foundation specialists.
In December 2017 Charlie Lee sold all the Litecoins he owned in favour of the Litecoin Foundation, explaining that he wanted to reduce his influence on the community, the market and the cryptoasset’s price.
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Why did Litecoin need the SegWit fork?
Segregated Witness (“detached witness”, SegWit) allows the block-size limit to be altered by removing signature data from transactions. The SegWit soft fork was originally intended to increase Bitcoin’s throughput. In April 2017 Litecoin did not need such a fix, yet the upgrade was activated on its network first.
As a result, the effective block size doubled. In addition, some experts believe the upgrade made Litecoin more adaptable than Bitcoin and prepared LTC for the rollout of the Lightning Network, which allows coins to be sent without fees. As Charlie Lee later said, his project effectively helped Bitcoin test SegWit.