Litecoin

Litecoin is one of the first cryptocurrencies created after Bitcoin and still strives to be the silver to Bitcoin's gold.

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

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.

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.

Litecoin Vs. Bitcoin

Litecoin began as a fork of Bitcoin and has several differences to its predecessor. First, it goes beyond the block limitations of its parent protocol, with a block time of two-and-a-half minutes. Second, Lee has architectured the network to function as a lighter and faster version of Bitcoin, as its name suggests.

Litecoin also uses a Scrypt hash function instead of Bitcoin’s SHA-256 in order to avoid being taken over by ASIC-based miners and to allow CPU and GPU miners to thrive. However, as time went on, ASIC miners were in fact able to develop Scrypt-based hardware and to infiltrate the Litecoin mining economy.

Litecoin was designed for speed, whereas Bitcoin was built for maximum security and immutability. As a lighter version of Bitcoin, it can process transactions a lot faster and prevent payment delays. Bitcoin payments are processed in around nine or ten minutes, which may be a bit slow for some situations. Bitcoin does, however, offer better security, as it allows more time for information to spread throughout a global network of peers (or nodes) before transactions are confirmed.