Litecoin was first issued in 2011, only two years after the first cryptocurrency had its debut. At the same time, Litecoin (LTC) is known as the “silver to Bitcoin’s gold” and also “Bitcoin’s little brother”, which is based on the fact that Litecoin was derived from the original Bitcoin code. LTC represents one of the top cryptocurrencies in the market and was also the first Bitcoin fork ever to be created and developed. Despite the similarities between Bitcoin and Litecoin due to the origin of LTC, there are some major differences between the two digital assets.
Litecoin is a digital asset with a blockchain-based network that has a primary goal to transfer monetary value with increased privacy and transparency. You can’t compare Litecoin to Bitcoin because it is practically impossible to explain exactly what Litecoin is and what it represents. Litecoin is the first fork or “copy” of Bitcoin to ever emerge, although Litecoin developers and creators did make sure that Litecoin has some advantages in terms of protocols and transactions when compared to the original Bitcoin Core protocol. Litecoin can be defined as a peer-to-peer currency backed by blockchain, that enables fast and near zero-fee transactions.
LTC is a currency and Litecoin represents a global payment network where people can send and receive money in the form of digital assets – Litecoin’s LTC. The network is open-source and decentralized which means that no central authorities control the network. Also, anyone can make suggestions on the way the network is maintained, updated and upgraded due to its open-source nature. To conclude the story about what Litecoin is and what it represents, Litecoin is the first attempt to “upgrade” Bitcoin by cutting the time needed for transactions to be validated, enabling faster block generation, lowering transaction fees, and enabling instant micropayments at low costs.
About the Founders of Litecoin (LTC)
Unlike Bitcoin, Litecoin doesn’t have an anonymous team/name behind the project – the team is quite transparent and in touch with the Litecoin community. At the same time, the Litecoin project is open-source which means that anyone can distribute, run, and modify the software. Litecoin was founded by Charlie Lee, a computer scientist best known for his role as the founder of Litecoin and the managing director of the Litecoin foundation. Lee is also a former employee of Google, where he started his position in the early 2000s and worked for Google for nearly a decade. Charlie Lee released Litecoin to the public with only 150 LTC units pre-mined before the official launch of the digital currency.
Talking about how Litecoin was realized as a project, Charlie Lee stated that there were no intentions to compete with Bitcoin or try to replace it, but rather create a similar solution to the original coin that would enable microtransactions at low cost. In 2013, Lee left Google and started working for Coinbase, which was before Litecoin was accepted by the exchange markets. Once Litecoin reached the top of the list of all cryptocurrencies and started gaining attention with profit returns, Lee donated and sold almost all his Litecoin units due to the conflict of interest and to preserve decentralization. The main objective of the team headed by Charlie Lee is to bring Litecoin to mass adoption, to which Lee is dedicated full-time. Originally created by Colin Percival and made unrelated to Litecoin network and LTC, Scrypt (“ess script”) was used by Charlie Lee in the architecture of Litecoin to assure democratized mining of LTC.
What is the LTC Currency?
LTC is the native currency of the Litecoin network and it used to transfer monetary value from address A to address B in a fast, secure, and transparent way. All this is possible while also enabling near-zero-cost microtransactions. Taking a sneak peek into how Litecoin originated from Bitcoin, one of the main ideas was to create a faster, while more cost-effective, digital currency for microtransactions. The team behind Litecoin made sure that LTC can indeed transfer microtransactions instantly and at a low cost. LTC is mined, which is how transactions are validated and new blocks generated. LTC also represents a ticker of Litecoin by which the currency is recognizable in the digital assets market.
LTC is usually ranked by its market capitalization between the 5th and 6th spot on the list of all cryptocurrencies, representing one of the top traded altcoins. LTC is defined as an altcoin, meaning it is an alternative to Bitcoin, which is also how the group of digital assets similar to LTC is known. The total supply of LTC is 4 times greater than BTC, as there is a limit to the production of LTC currency, set at 84 million LTC units.
Technology and Architecture
To be able to regulate the supply of LTC and prevent inflation while forming a certain level of demand for LTC, Litecoin uses halving just like Bitcoin. The process of halving is an automated process that takes place every 840,000,000 blocks, halving the mining reward for LTC miners. To ensure that mining is democratized and that ASIC miners can’t get an advantage over LTC miners with “lightweight” mining equipment, Litecoin uses Scrypt instead of SHA-256. The algorithm that Bitcoin uses allows ASICs to join the mining process and monopolize available mining pools as ASICs have a bigger capacity than regular mining equipment. The process of mining is backed with the Proof-of-Work consensus mechanism protocol, which is also the case with Bitcoin – however, the main difference between the original Bitcoin Code on which Litecoin is based is seen in the use of Scrypt algorithm. Proof-of-Work enables the validation of transactions by resolving complex mathematical equations using CPU power.
The protocol is not particularly energy-efficient, so it demands a lot of computational power. By resolving these equations, miners can prevent double-spending on the network, keep the network safe, and keep transactions up and running while enabling the creation of new blocks. Block time for Litecoin is set at 2.5 minutes when compared to the 10 minutes that Bitcoin takes to validate a transaction and generate a new block. That way, Litecoin is made into a faster and more of an every-day currency that people can use regularly. Litecoin is a fork derived from the Bitcoin Core client, however, the currency did bring some changes to the original code it utilized through the use of Scrypt and reduced the block time to make transactions faster.
Origins and History
As a digital asset, LTC is non-fungible, which means that Litecoin can’t be physically owned. Furthermore, Litecoin can’t be saved into a bank account or used in the form of paper money or physical coins, which is why owning a digital wallet when using Litecoin and other cryptos, is essential. Digital wallets are encrypted and made to protect your funds and keep your balance safe. Each wallet generates passwords or “private keys” that grant access to the user’s funds. That is why you need to take care of your private keys and avoid sharing them with others. LTC can be stored in hardware, software or paper wallets.
Hardware wallets have improved security and are perfect for holders who keep greater amounts of LTC and like to store their crypto units. The Trezor hardware wallet is an excellent choice for keeping your LTC funds, arriving with a handy feature that allows you to keep all your private keys securely stored. LTC can also be stored on exchange platforms that operate with digital assets and offer custodial services. In this case, your funds are nearly as safe as the exchange is secured against attacks, while the exchange may reset your password in case you lose it.
Software options for keeping and storing LTC are desktop and mobile wallets, while paper wallets are the least advanced but are as safe as keeping paper money in your wallet. Paper wallets work by printing your private keys and address to your wallet on a piece of paper. The advantage of paper wallets is noted in its physical form as your private keys become inaccessible to opportunistic hackers. Mobile wallets can be synchronized with desktop wallets, which enables easy accessibility to your funds through your smartphone. Whichever option you decide to choose for storing your LTC units, make sure to keep your Litecoin safe by taking care of your private keys and any sensitive information related to your account.