Litecoin

What Is "Litecoin" (LTC)?

"Litecoin" (LTC) is a cryptocurrency that was designed to provide fast, secure and low-cost payments by leveraging the unique properties of blockchain technology.

To learn more about this project, check out our deep dive of "Litecoin".

The cryptocurrency was created based on the Bitcoin (BTC) protocol, but it differs in terms of the hashing algorithm used, hard cap, block transaction times and a few other factors. "Litecoin" has a block time of just 2.5 minutes and extremely low transaction fees, making it suitable for micro-transactions and point-of-sale payments.

"Litecoin" was released via an open-source client on GitHub on Oct. 7, 2011, and the "Litecoin" Network went live five days later on Oct. 13, 2011. Since then, it has exploded in both usage and acceptance among merchants and has counted among the top ten cryptocurrencies by market capitalization for most of its existence.

The cryptocurrency was created by Charlie Lee, a former Google employee, who intended "Litecoin" to be a "lite version of Bitcoin," in that it features many of the same properties as Bitcoin—albeit lighter in weight.

Who Are the Founders of "Litecoin"?

As we previously touched on, "Litecoin" was founded by Charlie Lee, an early cryptocurrency adopter and a name held in high regard in the cryptocurrency industry.

Charlie Lee, also known as “Chocobo,” is an early Bitcoin miner and computer scientist, who was a former software engineer for Google. In addition, Charlie Lee held the role of director of engineering at "Coinbase" between 2015 and 2017 before moving on to other ventures.

Today, Charlie Lee is an outspoken advocate of cryptocurrencies and is the managing director of the "Litecoin" Foundation—a non-profit organization that works alongside the "Litecoin" Core Development team to help advance "Litecoin".

Besides Lee, the "Litecoin" Foundation also includes three other individuals on the board of directors: Xinxi Wang, Alan Austin and Zing Yang — all of which are accomplished in their own right.

What Makes "Litecoin" Unique?

Behind Bitcoin, "Litecoin" is the second most popular pure cryptocurrency. This success can be largely attributed to its simplicity and clear utility benefits.

As of January 2021, "Litecoin" is one of the most widely accepted cryptocurrencies, and more than 2,000 merchants and stores now accept LTC across the globe.

Its main benefit comes from its speed and cost-effectiveness. "Litecoin" transactions are typically confirmed in just minutes, and transaction fees are nearly negligible. This makes it an attractive alternative to Bitcoin in developing countries, where transaction fees may be the deciding factor on which cryptocurrency to support.

In late 2020, "Litecoin" also saw the release of the MimbleWimble (MW) testnet, which is used to test Mimblewimble-based confidential transactions on "Litecoin". Once this feature is available on the mainnet, "Litecoin" users will also benefit from greatly enhanced privacy and fungibility.

Get up to date with the latest "Litecoin" updates and discussion.

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How Many "Litecoin" (LTC) Coins Are There in Circulation?

Like most proof-of-work (POW) cryptocurrencies, the amount of "Litecoin" in circulation gradually increases with each newly mined block.

As of January 2021, 66.245 million LTC have already been mined out of a total maximum supply of 84 million. The "Litecoin" Foundation recently estimated it will be well over 100 years until "Litecoin" reaches full dilution (around the year 2140) — since the number of LTC mined per block decreases every four years as part of the block reward halving schedule.

Around 500,000 LTC was instamined on day one after the LTC genesis block was mined and Charlie Lee and presumably other early "Litecoin" developers were among the first miners.

Despite this, as a fairly distributed asset, the "Litecoin" developers or Charlie Lee do not receive any direct profits from the operation of Litecoin—other"Litecoin"—other than anything they may earn as part of the regular mining process.

When "Litecoin" listed on several markets in 2011, the "Litecoin" price hit $0.30. Then, from November to December 2013, it went on a massive bull run, with "Litecoin" price hitting a high of $44.73. However, the bear market and Mt. Gox hack caused "Litecoin" prices to crash in 2014, and prices consolidated within the $2 to $4 range for several years. In November and December of 2017, "Litecoin" price rallied over 500% to $358.34, on the back of the crypto bull market. "Litecoin" price hit an all-time high in May 2021, in the latest crypto bull run, which saw it reach $386.45 on May 9, 2021.

How Is the "Litecoin" Network Secured?

As a blockchain-based cryptocurrency, "Litecoin" is secured by incredibly strong cryptographic defenses — making it practically impossible to crack.

Like Bitcoin and several other cryptocurrencies, "Litecoin" uses the PoW consensus algorithm to ensure transactions are confirmed quickly and without errors. The combined strength of the "Litecoin" mining network prevents double-spends and a range of other attacks, while ensuring the network has 100% uptime.

Initially, it was a strong competitor to Bitcoin. However, as the cryptocurrency market has become much more saturated and competitive in recent years with new offerings, "Litecoin's" popularity has waned somewhatto some extent.

"Litecoin" has always been viewed as a reaction to Bitcoin. In fact, when Lee announced the debut of "Litecoin" on a popular Bitcoin forum, he called it the "liteLite version of Bitcoin." 1 For this reason, "Litecoin" has manya large number of the same features as Bitcoin, while also adapting and changing some other aspects that the development team felt could be improved.

"Litecoin" (LTC or Ł) is a peer-to-peer cryptocurrency created by Charlie Lee in October 2011. The Creation and transfer of coins is through an open source cryptographic protocol, and is not managed by any central authority. "Litecoin" is an open source software project under the MIT/X11 license.

In many regards "Litecoin" is technically nearly identical to Bitcoin, however, "Litecoin" claims some technical advantages over Bitcoin. For example, the block generation time of "Litecoin" is approximately 1/4 the block generation time of Bitcoin; making it four times faster. The reduced block time allows "Litecoin" to process faster transactions and increase throughput. The cost of speed improvements is a trade off between network propagation time to block creation time, which creates a variety of security tradeoffs.

"Litecoin" utilizes the scrypt hashing algorithm instead of Bitcoin's SHA256. Scrypt was made in 2014, and increases the difficulty of creating specialized "Litecoin" ASIC mining hardware.

"Litecoin" was an early adopter of the Segregated Witness update, adding it on May 10, 2017. "Litecoin" is also an early tester and developer of technologies such as the Lightning Network and atomic swap.

"Litecoin" is one of the oldest cryptocurrencies in existence, and a variety of decentralized projects have forked from the open source "Litecoin" codebase to create their own cryptocurrencies. Examples of cryptocurrencies forking from Litecoin directly, or originating from "Litecoin" forks, include: Feathercoin, Dogecoin, Dash, Gulden, Reddcoin.

"Litecoin" (LTC) is an alternative cryptocurrency created in October 2011 by Charles "Charlie" Lee, - a former Google engineer. "Litecoin" was adapted from Bitcoin's open-source code but with several modifications. Like Bitcoin, "Litecoin" is based on an open-source global payment network that is not controlled by any central authority. "Litecoin" differs from Bitcoin in aspects like faster block generation rate and use of Scrypt as a proof of work scheme.

Initially, it was a strong competitor to Bitcoin. However, as the cryptocurrency market has become much more saturated and competitive in recent years with new offerings, "Litecoin's" popularity has waned somewhat.

"Litecoin" has always been viewed as a reaction to Bitcoin. In fact, when Lee announced the debut of "Litecoin" on a popular Bitcoin forum, he called it the "lite version of Bitcoin."1 For this reason, "Litecoin" has many of the same features as Bitcoin, while also adapting and changing some other aspects that the development team felt could be improved.

Like other decentralized cryptocurrencies, "Litecoin" is not issued by a government, which historically has been the only entity that society trusts to issue money. Instead of being regulated by a central bank and coming off the press at the Bureau of Engraving and Printing, "Litecoins" are created by an elaborate cryptocurrency procedure called mining, which consists of processing a list of "Litecoin" transactions.

"Litecoin" was developed by Charlie Lee, a graduate of the Massachusetts Institute of Technology (MIT) and a former Google engineer who became interested in Bitcoin in 2011. According to Lee, "In October of 2011, I was playing around with the Bitcoin codebase, and I guess the short of it was that I was just trying to create ... a fork of Bitcoin. It was mainly a fun side project."

Like Bitcoin, the maximum number of LTC is fixed. There will never be more than 84 million "Litecoins" in circulation. Every 2.5 minutes, the "Litecoin" network generates a new block–a ledger entry of recent "Litecoin" transactions throughout the world. The block is verified by mining software and made visible to any system participant (called a miner) who wants to see it. Once a miner verifies it, the next block enters the chain, which is a record of every "Litecoin" transaction ever made.

There are incentives for mining "Litecoin": the first miner to successfully verify a block is rewarded with 12.5 "Litecoins". As with Bitcoin, the number of "Litecoins" awarded for such a task reduces with time. In August 2019, it was halved, and the halving will continue at regular intervals until the 84,000,000th "Litecoin" is mined. The "Litecoin" Foundation estimates that it will be around 2142 when the maximum of 84 million "Litecoins" will be reached.

Bitcoin, "Litecoin", and many other cryptocurrencies use the proof-of-work (PoW) algorithm in order to secure their networks. Basically, PoW requires that one party proves to all the other participating parties in the network that a required amount of computational effort has been expended. Unlike Bitcoin, which uses the SHA-256 PoW hashing algorithm, "Litecoin" uses the less resource-intensive Scrypt PoW algorithm.

Scrypt is a password-based key derivation function. According to "Tarsnip", "the scrypt key derivation function was originally developed for use in the "Tarsnap" online backup system and is designed to be far more secure against hardware brute-force attacks than alternative functions such as PBKDF2 or bcryptb-crypt."

At the beginning of the 2010s, as mining operations developed specialized hardware, like the application-specific circuit (ASIC) to solve SHA-256 hashing, it appeared that Bitcoin was vulnerable to such an attack. By making "Litecoin's" consensus algorithm memory intensive, Lee sought to thwart the hardware arms race, though in practice that didn't happen as the rise of GPUs answered the need for greater RAM.

"Litecoin" was launched with the aim of being the "silver" to Bitcoin's "gold." Like Bitcoin, "Litecoin" is a peer-to-peer internet currency. It is a fully decentralized, open-source, global payment network. Lee developed "Litecoin" with the aim to improve on Bitcoin's shortcomings. The broader differences between the two cryptocurrencies are listed in the table below.

"Litecoin" is designed to produce four times as many blocks as Bitcoin (1 new block every 2.5 minutes to Bitcoin's 10), and it also allows for 4x the coin limit, making its main appeal over Bitcoin to do with speed and ease of acquisition. However, because "Litecoin" uses Scrypt (as opposed to Bitcoin's SHA-256) as a proof-of-work algorithm, the use of mining hardware such as ASIC miners or a GPU mining rig requires significantly more processing power.

"Litecoin" ranks in the Top 15 largest cryptocurrencies in terms of market capitalization (though still remaining far below that of Bitcoin), and as of November 2021, it had more than 69 million coins in circulation.