Litecoin is a peer-to-peer crypto currency that was developed on the base of Bitcoin and has an open source code. Unlike Bitcoin, the Litecoin blockchain is able to process a greater number of transactions.
Litecoin was released via an open-source client on GitHub on October 7, 2011 by Charlie Lee, a former Google employee. The Litecoin network went live on October 13, 2011. It was a fork of the Bitcoin Core client, differing primarily by having a decreased block generation time (2.5 minutes), increased maximum number of coins, different hashing algorithm (scrypt), instead of SHA-256), and a slightly modified GUI.
During the month of November 2013, the aggregate value of Litecoin experienced massive growth which included a 100% leap within 24 hours.
Litecoin reached a $1 billion market capitalization in November 2013. By late November 2017, its market capitalization was US $4,600,081,733 ($85.18 per coin).
In May 2017, Litecoin became the first of the top-5 (by market cap) cryptocurrencies to adopt Segregated Witness. Later in May of the same year, the first Lightning Network transaction was completed through Litecoin, transferring 0.00000001 LTC from Zürich to San Francisco in under one second.
The creator of Litecoin – Charlie Lee, a former employee of Google – took the Bitcoin source code as a basis and created a crypto currency that needs 2.5 minutes to generate a block – this is 4 times faster than Bitcoin .
The full emission of Litecoin makes out 84 million coins, which is also 4 times more than of Bitcoin. The start reward for a block made out 50 Litecoins, and now it is 25 Litecoins. The Litecoin generation speed reduces twice for every 840, 000 blocks. It is supposed that about ¾ Litecoins will be generated by 2020.
Litecoin uses the Scrypt hashing algorithm. The equipment for using this algorithm is more expensive than on SHA-256, which is used by Bitcoin. As the process requires more memory, graphics processors suit better for the Litecoin mining.
The Litecoin cryptocurrency was initially created as a more perfect alternative of Bitcoin. Now Litecoins are called “silver coins” on the analogy of “golden” Bitcoin, and in 2017, Litecoin showed even a bigger growth, which hit upon the prohibitive decision of the Chinese government.
Today, it came out from the five of the largest crypto currencies on the market capitalization level and takes the sixth place with the capitalization of 2.786 billion dollars.
At that, the popularity of Litecoins remains in place. In October 2017, the Waves Platform announced the opening of a gateway for Litecoin, which made the crypto currency available for use within its own network.
Heavily based on Bitcoin this coin is almost identical to it, although it has some key differences:
- Instead of using SHA-256 algorithm for its proof-of-work like Bitcoin does, it uses Scrypt. This algorithm was originally designed to make it costly to perform large-scale custom hardware attacks by requiring large amounts of memory. This makes building ASIC designs for mining Litecoin rather expensive because of memory being the most high-cost component of such systems.
Thus Scrypt algorithm strips any FPGA, GPU and ASIC users of their advantage over CPU miners and as such is very suitable for the intended purpose of allowing an even distribution of Litecoin mining capacity between network users. Unfortunately with rising popularity of the currency now there are ASICs for Litecoin mining in development nevertheless.
Other cryptocurrencies are experimenting on much heavier hashing algorithms to remain ASIC-resistant.
- Faster blocks: a single block is mined roughly every 2.5 minutes, four times faster than in Bitcoin. This leads to transaction confirmation times being also four times faster and difficulty changing about every 3.5 days (the difficulty changes every 2016 blocks just as with Bitcoin but they are mined faster).
- The entire amount of LTC to ever be produced is four times higher than that of BTC and equals to 84 million coins.
Differences from Bitcoin
Litecoin is different in some ways from Bitcoin.
- The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes. The developers claim that this allows Litecoin to have faster transaction confirmation.
- Litecoin uses scrypt in its proof-of-work algorithm, a sequential memory-hard function requiring asymptotically more memory than an algorithm which is not memory-hard.
Due to Litecoin's use of the scrypt algorithm, FPGA and ASIC devices made for mining Litecoin are more complicated to create and more expensive to produce than they are for Bitcoin, which uses SHA-256.
- Litecoin official website
- Wikipedia.org - Litecoin
- Litecoin – Charlie Lee’s Open Source P2P LTC Cryptocurrency Guide?
- Litecoin Prices Plunge As Crypto Markets Suffer Sell Off