Blog Cryptocurrency Terms

What is Litecoin? An Early Bitcoin Fork Nearly Identical to the Original Chain

single-image

In the world of blockchain and cryptocurrencies, there is a large number of forked protocols that inherit the majority of their properties from the parent blockchain networks. Litecoin is one such network forked from Bitcoin, the largest and most popular blockchain protocol in the world. It comes as no surprise that Litecoin’s technical details are slight modifications of Bitcoin.

What is Litecoin?

In the simplest of terms, Litecoin is one of the earliest Bitcoin forks. It is a peer-to-peer cryptocurrency created by Charlie Lee, an ex-Google employee and former Coinbase engineering director, based on Bitcoin code. Litecoin was released as an open-source software project on GitHub in the last quarter of 2011. At the time of writing, Litecoin is the sixth largest cryptocurrency with a market cap of $4.8 billion, according to CoinMarketCap data.

Litecoin vs. Bitcoin

The best way to understand Litecoin is to compare it with Bitcoin. If Bitcoin is a soda drink, then Litecoin is a diet soda.

While Bitcoin is groundbreaking, it has some major flaws and almost every cryptocurrency in existence was designed to address the flaws found in the popular digital currency. Lee modified Bitcoin’s code in an attempt to reduce the block size and create new protocol he believed was conducive for large scale adoption.

Block time

Bitcoin has a block confirmation time of 10 minutes but this was reduced to 2.5 minutes in Litecoin, making the latter 4 times faster than the former. This essentially means that a Litecoin block is mined every 2.5 minutes.

Hard cap

The second notable difference between Litecoin and Bitcoin is the total supply. Bitcoin is hard capped at 21 million (and all these coins will not be mined until 2140) while Litecoin has a total supply of 84 million.

The reason for the hard cap has everything to do with supply and demand – one of the most well-known economics principles. In principle, an asset is more valuable if it is in short supply. In the real world, fiat currencies lose their value when governments print more money.

Mining

One of the fundamental differences between Bitcoin and Litecoin is how they are mined. The two blockchain networks employ the Proof-of-Work (PoW) consensus algorithm for their procedure. The miners (entities responsible for maintaining the networks and minting new coins) use their computational power to solve very difficult mathematical puzzles and rewarded with new coins for their efforts.

While the two cryptocurrencies essentially employ the same mining principles, they approach it in different ways.

Bitcoin utilizes the SHA-256 hashing algorithm. This allows miners to pool together their mining resources and form mining pools in order to increase their chances of solving the puzzles. The SHA-256 algorithm requires a lot of power. This resulted in the mass production of the more expensive and crypto mining focused Application-Specific Integrated Circuits” ASICs.

While this is efficient, it goes against the principles of decentralization that aims to provide an equal opportunity for everyone to equally take part in the creation of new coins. Initially, anyone with a computer could take part in Bitcoin mining but the advent of ASICs centralized the whole process.

The Bitcoin network is now controlled by a few mining pools and if a single pool manages to control more than half of the network’s hashrate, they can re-write the blockchain in what is known as a 51 percent attack.

Bitcoin mining is considered to be wasteful as it requires a lot of electrical energy.

Litecoin tries to address these challenges by using the Scrypt algorithm. The Scrypt algorithm makes use of the SHA-256 algorithm but does not allow parallel transactions. This means that it cannot carry out transactions simultaneously but have to be carried out one after the other.

This was done in order to democratize the mining process and depart from Bitcoin’s more centralized mining process. However, some companies are developing specific Scrypt ASICs and this could change Litecoin’s mining democracy.

Litecoin achievements

Litecoin has implemented a number of innovative solutions such as Atomic Swaps and Segregated Witness (SegWit).

Litecoin Atomic Swaps

Litecoin has introduced what is known as Atomic Swaps. This innovative solution allows two entities to swap coins without using a third party.

For example, if you have one Bitcoin (BTC) and want 50 Litecoin (LTC) in return, you would traditionally sell the BTC on an exchange and then buy BTC. You incur fees on this transaction and the value of your digital holdings is diminished.

With Atomic Swaps, you can easily swap your  BTC with someone who has LTC without using an exchange.

Litecoin adopted SegWit in May 2017. SegWit is a sidechain that reduces the load on the main chain and increases transaction speed.

How to buy and sell Litecoin

You can buy and sell Litecoin at well-known exchanges that include Coinbase, Huobi, Bitfinex, Changelly, Poloniex, Kraken, Binance, and more.

There are now several crypto ATMs that allow you to buy Litecoin with fiat. You can also buy Litecoin using cash at various platforms that include Coinmama, 247exchange, Litecoinlocal.net, Cryptex24, etc.

Coinmama, Coinbase, 247exchange, and Indacoin allow you to use a credit card to buy Litecoin.

Litecoin wallets

A cryptocurrency wallet is a pre-requisite for anyone who wants to own digital currencies such as Litecoin. There are several types of wallets that include hot and cold wallets. Each has its own advantages and disadvantages.

Hardware wallets are regarded as safe although they cannot be completely trusted. You can use Trezor or Ledger Nano S to safeguard your Litecoin.

These wallets are similar to a USB stick. However, it is advisable to buy a new hardware wallet instead of opting for a second hand one.

You can also make use of desktop wallet such as Exodus to store Litecoin. These wallets are an example of a hot wallet but are only accessible from a device that they were installed on.

Mobile wallets are another way to go. They are very convenient because they give you access to your Litecoin as long as you have your smartphone with you.

Here is a list of wallets that support Litecoin:

  • Abra
  • Ledger Nano S
  • LoafWallet
  • Trezor
  • Jaxx
  • Exodus
  • LiteAddress
  • Electrum LTC
  • Atomic Wallet
  • Litecoin Core
  • Litevault

Final words

The popularity of Bitcoin and the need for the growing demand for alternative cryptocurrencies has contributed to the wider adoption of Litecoin. The digital asset has become more popular as companies adopt the digital currency and accept it as a means of payment. Litecoin’s future looks brighter after Lee stated that he wants to add fungibility and privacy to the cryptocurrency.

Beginners Guide To Crypto
Subscribe to get your beginners guide and our weekly digest
We respect your privacy.

You may also like

Blockchain Blog Interviews Investing

The Biggest Investing Opportunities In Blockchain | Aly Madhavji Partner BlockchainFF

single-image

ChainTalk Podcast 7

Aly Madhavji is Managing Partner at Blockchain Founders Fund. In this chat we discuss his slightly sketchy first experience with crypto, tokens vs equity investing, biggest opportunities right now to invest in, obstacles faced by blockchain companies, working with the United Nations and how blockchain is helping charities and the unbanked, the present and future of blockchain, Asia vs USA in adopting crypto, and the latest news in Asia surrounding crypto including the US China trade wars and recent currency scandal.

Aly Madhavji 穆亚霖 is the Managing Partner at Blockchain Founders Fund which invests in and venture builds top-tier Start-ups and consults companies and governmental organizations on emerging technologies. He is a Senior Investment Advisor to BitBlock Capital and Fiat Capital Fund, and a Co-Founder of a digital currency exchange. He has served on various blockchain advisory roles including Polymath and traditional advisory boards including the University of…

View More Article
Blog Events Press Release

天英彙が東京湾で初めて行われ、良質なグローバル科学技術革新資源をリンク

single-image

8月6日夜、2019広州天英彙国際革新創業大会東京湾地区の開会式が東京表参道Portal Pointイノベーション空間で行われた。これらは天英彙が初めて日本で設定した競技場だ。広州市天河区政府の関係者たちと日本学習院大学の遠藤薫さんらが本開会式に出席した。

広州市天河区人民政府区長の陳加猛が挨拶した。陳加猛は、「今年は天英彙が初めて東京で都市競技場を設立し、東京は経済が繁栄し、科学技術が進歩し、世界で最も重要な国際的な都市の一つであり、その東京湾は広東・香港・マカオ大湾区と同じで世界四大ベイエリアに属し、競技を通じて両大湾区のコミュニケーションの橋渡しをし、日本の優れた企業、プロジェクト、技術と人材を、質の高い発展に推進している広州経済とうまく結びつけていきたいと思う」と述べた。

その後、日本学習院大学教授の遠藤薫は「今こそ日本のイノベーターにとって最高の創業時代だ。工業化後に蓄積された技術革新と知識によって、理性的な日本資本市場は、市場競争力のあるイノベーションを生み出すだろう。より多くの良質な日本のイノベーション事業が天英彙の助けを借りて、中国市場とよりよくリンクすることを期待している。」と挨拶した。

次に、会場からのカウントダウンの声の中、陳加猛、遠藤薫、天英彙海外地区主催側代表者、IBM日本代表者、アリババ クラウド日本代表者と日本人工知能イノベーション企業Autify代表者が共同で天英彙東京湾の横断幕を掲げ、天英彙試合会が日本に正式に始まることを示した。

Brincグローバル投資インキュベーター中国執行総裁の潘利文氏は、天英彙海外競技エリアを代表して起業家たちに大会制度、広州天河地区の優位性と政策環境、大会の賞金賞品及び1週間の中国市場と資本の連結の旅について詳しく説明した。

続いて行われた「広東·香港·マカオ大湾区と東京湾区イノベーション円卓フォーラム」では、 Brincグローバル投資インキュベーター中国市場とチャンネルの責任者の曽君蔚とIBM日本デジタルコンサルティング専門家の吉本久、TMI総合法律事務所の小川周哉と日本人工知能イノベーション企業Autifyの最高経営責任者の近沢良は、イノベーション企業がいかに効率的に新しい市場に参入できるかについて議論を深めた。

イベントの最後の自由コミュニケーションセクションでは、東京湾区の起業家は広東・香港・マカオ大湾区の建設がもたらすチャンスに強い興味を持ち、現場の雰囲気は非常に盛り上がっている。

今年度は、天英彙海外競技エリアはサンフランシスコ湾、ニューヨーク湾、トロント、シドニー、東京湾、シンガポール、テルアビブ、ベルリン、パリという9大国際イノベーション都市にそれぞれ競技場を置き、少なくとも600以上のグローバルイノベーションプロジェクトを募集する予定だ。今日まで、広州天英彙国際イノベーション創業大会海外競技エリアはすでに八大国外イノベーション都市地区で盛大に開会式を行い、 その中で、米国オークランド市長のシュエリビ、世界最大のインスタントメッセージングソフトウェアWhatsAPP共同創立エンジニアのEugene Fooksman、パリ19区副区長のJoyce Malai、シンガポール国立大学企業センターの副主任の陳正見、欧州華創会会長の黄進などの革新生態分野の重要なのゲストは各競技区の開会式に出席し、天英彙の競技参加者たちに祝福の言葉を贈った。それと同時に、天英彙は国際イノベーション生態の発展を積極的に推進していて、アメリカのオークランド市長のシュエリビと広州市天河区政府の関連責任者を証人として、天英彙競技海外地区主催側Brincグローバル投資インキュベーターはオークランド華埠商会、サンフランシスコ湾委員会とそれぞれ契約を締結し、同天英彙国際イノベーション連盟が第一歩を踏み出したことを示し、今後は更に多くのグローバルイノベーション都市との契約提携を推進し、国際イノベーション生態の発展を進める。

View More Article
Blockchain Blog Interviews Investing

Changing Banking With Blockchain – Tomohiro Yamaguchi Executive Director SBI

single-image

ChainTalk Podcast 6

Tomohiro Yamaguchi is Executive Director at SBI Fintech Solutions. In this chat we discuss his background and role at SBI, SBI’s commitment to blockchain technology, their investment into Ripple, cross border transactions within banks and the affect on international business, Libra and bank tokens, blockchain in the Middle East, and opportunities for investors.

Yamaguchi-san is an 18-year experienced pioneer in finance business and payment/international money transfer industry, in charge of new projects, management and development in Japan and overseas Fintech business. In addition, he is representative of global investment, international money transferring, blockchain space. He was in charge of overseas business development (including fund and financing services) for the SBI group. He leads a team of 17 business development directors.

Visit SBI: http://www.sbigroup.co.jp/english/

Check out last weeks episode on Ripple: https://youtu.be/14EyQ6WKevc

If you enjoyed this episode and want to support our podcast please share it with your colleagues and friends….

View More Article
Blockchain Blog Cryptocurrency Exchange Mining News

Gone Missing: India Misses the Point on Crypto Regulation, Justin Sun Skips Lunch with Warren Buffett

single-image

India is taking a step backward in innovation as it proposes to a blanket ban on cryptocurrencies and severe punishment for those caught on the wrong side of the law. Justin Sun’s delayed his charity lunch with bitcoin critic Warren Buffett due to kidney stones. A bank in the Philippines has launched its own cryptocurrency. Cryptocurrency exchanges need to beef up their security strategies as new reports suggest that they lost $1.2 billion in theft and fraud in Q1 alone. 

Indian panel proposes cryptocurrency ban and jail time for offenders

India’s hostile position on cryptocurrency does not seem to be taking a turn for the better. A high-level panel created by three institutions – Ministry of Electronics and Information Technology, the Securities and Exchange Board of India, and the Reserve Bank of India – has recommended the banning of private cryptocurrencies issued in foreign lands…

View More Article
Blog Cryptocurrency Interviews Investing

Early XRP Whale Discusses Secrets Of Ripple | Ep 5 | Seth Lim CEO Soar Labs

single-image

ChainTalk Podcast 5

Seth Lim is founder and CEO of Indonesian crypto exchange Soar Labs and exclusive watch company Watch Gain. In this chat we discuss how he discovered Ripple and invested in it, his time in the army, growing Ripple in China, secrets behind how XRP and Ripple work, what we can expect out of Ripple in the future, starting his crypto exchange in Indonesia, and luxury watches.

Seth Lim is the CEO and founder of Soar Labs and cryptocurrency exchange soarexchange.io. He oversees the strategy and plan for Soarcoin’s growth and drives the passion and process behind the scenes at Soar Labs. He became part of the Cryptocurrency community back in 2011 with his first purchases of Bitcoin and began building his cryptocurrency portfolio. In 2016, he was managing a $80m private funds from investors in China and Dubai to invest in Ethereum, Litecoin, Ripple and Dogecoin. He was…

View More Article