Bitcoin was the first genuinely successful cryptocurrency launched in 2009. As you know, bitcoin’s success spawned many others, with one such crypto being Litecoin. Litecoin was one of the first alternatives to bitcoin, or “altcoins,” as they became known.
While certainly not the largest or most popular cryptocurrency, it offers users several advantages. This article will take a closer look at Litecoin, understand how it works, and the benefits it offers users.
- Litecoin was founded in 2011 by former Google engineer Charlie Lee.
- LTC offers faster transaction times than Bitcoin.
- Litecoin shares several features with Bitcoin but uses a different hashing algorithm.
- Unlike Bitcoin, which has solidified its reputation as a store of value and hedge against inflation, Litecoin was created for daily transactions.
What Is Litecoin?
Litecoin was created in 2011 by Charlie Lee, a former Google engineer. It became one of the first “altcoins” in the crypto space. An altcoin is simply the name given to cryptocurrencies other than bitcoin and sometimes Ethereum. Intended to become the silver to Bitcoin’s gold, Litecoin was introduced as a digital currency that can be used purely for payments.
Like Bitcoin, it runs on an open-source blockchain protocol, free from any centralized authority’s influence. Each node operator maintains a copy of the blockchain, ensuring that transactions are up to date and do not contradict the transaction history.
Litecoin also uses a Proof-of-Work consensus mechanism to verify and validate transactions on the blockchain. However, while Bitcoin uses an SHA-256 hashing algorithm, Litecoin uses Scrypt, which allows it to achieve significantly faster transaction times.
A week before the official launch, Lee released the cryptocurrency’s source code and binary, allowing users to test mine before it went live. The day and time of the launch were also decided by a community through a poll on the Bitcointalk forum so that users could select a convenient time.
What Is Litecoin Functionality?
Litecoin uses an updated version of Bitcoin’s original code and can offer significantly faster transaction speeds. All of the transactions are recorded and stored on the Litecoin blockchain. The blocks containing transaction data are validated and added to the blockchain by miners, who are incentivized through rewards. Currently, the reward for miners is 12.5 LTC. The last halving event occurred in August 2019, when the reward was slashed from 25 LTC to 12.5 LTC. The rationale behind the cryptocurrency’s halving is the same as bitcoin, to maintain the scarcity of the asset in the long run.
Like Bitcoin, Litecoin’s supply is also capped, just not at 21 million. Instead, its maximum supply is capped at 84 million, out of which 66 million are currently in circulation. Miners on Litecoin can mine a block every 2.5 minutes, which is four times faster than Bitcoin’s 10 minutes.
Litecoin saw several new features later implemented on the bitcoin network, including SegWit, Lightning Network, and Mimblewimble.
Segregated Witnesses (SegWit) was one of the first features to be added to Litecoin. While it was first proposed for Bitcoin in 2015, Litecoin was the first to adopt the technology. When no major incidents or errors were reported, the technology was adopted by Bitcoin. SegWit helps a cryptocurrency to scale better by separating or segregating the digital signature data on each transaction.
The Lightning Network is another scaling solution that was first implemented on Litecoin before being adopted on bitcoin. The Lightning Network uses hashed timelocks to process transactions on layer 2, a separate layer built on top of the existing blockchain.
Recently, Litecoin implemented privacy features via mimblewimble. MimbleWimble, named after the tongue-tying spell from the Harry Potter series, was deployed on the Litecoin network on May 19th, 2022.
Litecoin vs Bitcoin: The differences
|Creator||Satoshi Nakamoto||Charlie Lee|
|Block time||10 mins||2.5 mins|
|Upper cap||21 million||84 million|
|Lightning Network implemented?||Yes||Yes|
In Closing: Where To Buy Litecoin
Litecoin has a fascinating history closely tied to bitcoin. What started as a small experiment quickly became one of the first and most prominent altcoins in the crypto space. While it may not be as prominent as it once was, respect must be given to Litecoin for always being open to innovations like SegWit, Lightning Network, and Mimblewimble. You can check the latest prices for Litecoin and learn more about LTC at CoinSmart.