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

Blog Events Interviews Investing

Chinese Investor Says Opportunity In Southeast Asia For Crypto | Interview Du Jun

single-image

Eric interviews Chinese crypto investor Du Jun from Node Capital. They discuss:

➤ Investments Du Jun has made since TEAMZ summit in Tokyo

➤ His reaction to the price increases in different cryptocurrencies

➤ His predictions for Bitcoin in the future

➤ His stance on investing in Southeast Asia

Guest Bio

Jun Du is the founding partner of Node Capital, founder of Jinse Finance, and co-founder of several top blockchain companies, such as Chainup, Hiwa, JohnWick Sec. He is one of the earliest professional investors to invest in Blockchain industry. He had worked at well-known Internet companies, Tencent and Discuz, and cofounded the cryptocurrency exchange platform, Huobi. With professional knowledge, great experience and industry resources, he is good at marketing operation and enterprise incubation. The invested blockchain projects have more than two hundreds.

View More Article
Blockchain Blog Terms

What is a Distributed Ledger Technology?

single-image

The term ‘distributed ledger’ has been thrown around too many times around blockchain conversations. Many people consider blockchain technology and distributed ledger as one and the same thing. This is technically not true although the two are related. So, what is a distributed ledger? The answer lies in this article.

I will begin our journey into distributed ledgers by looking at what a ledger is. A ledger is simply a record of related data. It has existed for as long as the societies became complex and required a bookkeeping system to keep track of important economic activities.

Ledgers existed on paper until computers became accessible in the 1980s and 1990s. There was a transition from paper ledger to digital ones. The majority of the new digital ledgers were simply digitized versions of what previously existed on paper.

Since the beginning of time, a single…

View More Article
Blog Events Press Release

Asia Blockchain Summit Coming in July, First 1000 Onsite Registrants on 7/2 Gets Ledger Wallet ABS Limited Edition

single-image

Asia Blockchain Summit 2019 (ABS 2019) announced its collaboration with the world-famous hardware wallet company Ledger, who will sponsor 1000 ABS Limited Edition Ledger Wallets based on the classic Ledger Nano S that’s worth $200 to participants of ABS2019. Through the world-class platform of ABS2019, the collaboration is expected to raise global crypto industry’s awareness to asset security.

Asia Blockchain Summit 2019 , the biggest blockchain event in Asia, will take place in Taipei, Taiwan on July 2-3, expected to attract over 5,000 blockchain industry elites and over 300 top companies worldwide. Apart from the main agenda, a huge amount of visitor flow and activities held by different companies will also liven up the whole week, making it a non-stop event of “Taipei Blockchain Week”.

The main activity of ABS 2019 contains two important parts:…

View More Article
Blockchain Blog Events Interviews

“Blockchain Has Been Overshadowed By Bitcoin” | Interview TAN SRI LEE KIM YEW

single-image

Eric interviews the founder and chairman of The Mines Resort Bhd and Country Heights Holdings Bhd, Tan Sri Lee Kim Yew. This discuss:

➤ His outlook on blockchain and cryptocurrency

➤ The future of blockchain in Malaysia

➤ How blockchain will impact the growth of Southeast Asia

➤ The new blockchain hub being built in Malaysia

Guest Bio

Considered ‘the godfather’ of The Mines Resort and Country Heights Holdings, he has enabled his businesses to grow and diverge into a wide range of sectors including health and education. While some deem him a social butterfly, Tan Sri is actually a family man who enjoys the comforts of home.

View More Article
Blog Events Press Release

TEAMZ Blockchain Summit in Kuala Lumpur, Malaysia

single-image

The “Asia TEAMZ Blockchain Summit”, organized by TEAMZ and LEGNACAP, co-hosted by HUOBI Global, JINSE Finance, COINTIME, SoarEX and HOSTASTAY was held successfully on June 13th at the Sunway Pyramid Hotel in Kuala Lumpur, Malaysia.

The Malaysian governors, managers from local listed companies, local funds, Investment banks, experts and the scholars from Japan, US, China, South Korea, the Philippine, Indonesia, Vietnam, Thailand and the cutting edge projects from Blockchain all came together to discuss controversial topics and the overall trend in the industry. The objective is to lay the foundation to the future development of blockchain in South East Asia.

The Opening speech was delivered by the TianYu Yang, CEO of TEAMZ. Following after the Keynote speeches and Roundtable discussions.

TEAMZ INC is an organization provides key strategies to incubate and accelerate startups in the blockchain industry. The…

View More Article