What Is Litecoin? All You Need to Know About LTC
What Is Litecoin?
Before 2014, most of the alternative coins to bitcoin (altcoins) had the sole purpose of replicating the success of bitcoin by, for example, trying to modify the average time it takes to discover a new block, thus making transactions faster. In fact, there were numerous concerns over Bitcoin’s waiting times in confirming block transactions. However, almost all of the projects, which at the time were considered innovative, gradually failed and their related coins disappeared from the market. At the time, another major concern arose, since Bitcoin mining was largely performed by GPUs and CPU resources were becoming obsolete and worthless for mining. According to the main proponents of this theory, this risked causing high barriers to access bitcoin mining, and consequently an excessive centralization of its network. ASICs machines, designed for mining, were very expensive back at the time, but the first large bitcoin mining farms started emerging nevertheless. During this period, Litecoin was created with the aim of solving these alleged problems.
The Litecoin project was launched on October 7, 2011 by Charlie Lee, a former Google and Coinbase employee who graduated from MIT. Litecoin is considered by many to be the first altcoin, because on a technical level it is the result of a fork of the Bitcoin blockchain. Although it adopts the same code as Bitcoin, it prioritizes transaction confirmation speed to facilitate a higher transaction per second (TPS) and a shorter block generation time. Everything was designed to make Litecoin an ideal peer-to-peer currency for merchants and businesses who, according to Lee”… [the merchants] do not need transactions to be super secure. Most merchants can readily accept 1-confirmed transactions “. Lee agreed that fast confirmations are not necessarily as secure as bitcoin’s slower confirmations, but in any case he thought there was a need for a currency a little more ‘lite’ than bitcoin.
How Does Litecoin Work? Consensus Mechanism and Differences with Bitcoin
As already mentioned above, Litecoin is a product created by a fork of Bitcoin, meaning that it shares its code and certain features. In fact, Litecoin’s consensus mechanism is Proof of Work (PoW) operated through mining. However in Litecoin’s case, the algorithm in question is not SHA-256, but one called Scrypt. This hashing algorithm can generate new blocks roughly every 2.5 minutes, while the Bitcoin block confirmation time takes 10 minutes on average. Scrypt mining requires fewer resources but more memory than Bitcoin mining and has been adopted to benefit miners who use CPU cards, i.e. those with a normal home computer rather than ASICs owners, and therefore risk centralizing mining. However, the algorithm is not the only parameter that distinguishes Litecoin from Bitcoin. There is more, as shown below.
Mining difficulty- the degree of difficulty involved in discovering new bitcoin blocks through mining - adjusts every two and a half days instead of every two weeks.
Halving- the planned halving of the miners’ reward and which allows to avoid the inflation of the currency - occurs every 840,000 blocks instead of 210,000. However, this happens every four years for both coins.
Total supply- the maximum number of coins that can exist - is four times higher than bitcoin’s, with 84 million in comparison to 21 million.
These parameters, which however are not very far from those of Bitcoin, have allowed the Litecoin project to remain one of the most long-lived and well-known ones in the world of cryptocurrencies. The Litecoin blockchain has worked without major problems and has therefore demonstrated its security.
On many occasions, Litecoin has proved to be useful for Bitcoin development due to the similarities between the two blockchains. For instance, Litecoin has been used as a testing platform for updates to be adopted on the Bitcoin protocol. One of the main features implemented on the Litecoin blockchain before being added to Bitcoin was Segregated Witness (SegWit), which is an update that has improved the scalability of Bitcoin by optimizing the amount of data in a block.
Another important feature tested on Litecoin was the Lightning Network, which is another very efficient scaling solution that aims to provide an overlay to the main blockchain (layer 2) to accelerate the speed of transactions. This extra layer consists of user-generated payment channels that allow lower transaction fees, and is now mostly used on Bitcoin.
In addition, the Litecoin Foundation is working on integrating with a privacy-oriented protocol called MimbleWimble. This is a process for achieving improved transaction privacy by preventing individual inputs and outputs related to transactions from being identified. Simultaneously, the protocol should improve transaction scalability, as it eliminates some transaction information. This implementation has recently caused the spread of negative news about Litecoin, as the regulators seem to dislike the decreased transactions transparency. The risk is that they may block the purchase and sale of the LTC coin in crypto exchanges in the future.
What Is the LTC Coin?
LTC is the cryptocurrency that runs on the Litecoin blockchain. It is a form of digital money that can be used to transfer funds directly between individuals or businesses. Its maximum supply is 84 million units, of which 71.3 (85%) are already in circulation (October 2022). As already mentioned, LTC can be transferred by paying extremely low transaction fees, which makes it suitable for micro-transactions and point-of-sale payments. According to a research by Coinmarketcap, as of January 2021 more than 2,000 merchants and stores were accepting LTC across the globe, making it one of the most widely accepted cryptocurrencies.
Litecoin came out with a very small premine. Only 150 LTC were premined as the ‘genesis block’ (the very first one) and to confirm its validity, two subsequent blocks were initially mined. At the launch of the project, the block reward was 50 LTC.
Litecoin Use Cases
It is well known that Litecoin was not created to be a developer-oriented platform for building decentralized applications and smart contracts on it. The initial intention was to make LTC a ‘silver to Bitcoin’s gold’: a scarce, secure, and decentralized currency with faster transactions. There have been a few attempts to get the project into the DeFi/Gaming world, but without success. In 2020, a Litecoin-based fantasy role-playing game was launched in a partnership with CipSoft. The name was LiteBringer, and it was supposed to be a blockchain-based fantasy RPG. However, by the end of March 2022, its development was discontinued.
Today, LTC is popular among investors who rely on its limited supply and issuance reductions to speculate its price, or among traders who seek exposure to the crypto market’s movements without any negative surprises. LTC is also widely used to move funds between different exchanges or lending platforms to avoid high transaction fees.
Lastly, LTC is used to pay for goods and services, with the support of most cryptocurrency payment processors. Since 2021, a virtual Litecoin VISA debit card has become available to users. Thanks to the Litecoin Card, users can deposit LTC to their account and spend tokens wherever a VISA is accepted.
Is Litecoin a Good Investment?
Nowadays, it is difficult to say whether or not Litecoin is a good investment. In terms of technological development, LTC has lagged far behind many other projects that were born later.
However, LTC is a currency whose supply is programmed to be limited and deflationary, so it could appear as a safe haven to some investors, especially in times of inflation or economic crisis. Furthermore, because of the fast and cheap transactions, it could represent an attractive alternative to Bitcoin in developing countries where transaction fees may be the deciding factor on which cryptocurrency to support.
Last but not least, Litecoin’s blockchain has been proven secure enough to avoid 51% attacks and no vulnerabilities have been found in the code, so it has proven its reliability.
How to Own LTC?
One way to own LTC is to go through a centralized crypto exchange, so the first step is to create a Gate.io account and complete the KYC process. Once you have added funds to your account, check out the steps to buy LTC on the spot or derivatives market.
News on Litecoin
According to an announcement by cryptocurrency exchange Binance, on June 13, 2022, the platform is ending the support for Litecoin (LTC) transactions sent through the latest MimbleWimble (MWEB) upgrade.
At the beginning of the development of this upgrade, some developers had already expressed concern about the undesirable outcomes that this would lead to the adoption of Litecoin. This upgrade can enable users to achieve a high level of privacy while transacting on the network, which apparently neither regulators nor many trading services like. Binance was not the first company to take action against this upgrade: in fact, just a few days earlier major South Korean crypto exchanges delisted LTC from their platforms. Crypto exchanges are becoming increasingly regulated and controlled in the modern world, so it is no surprise that private crypto transactions are frowned upon. Gate.io also ended the support for MWEB Litecoin transactions, claiming anonymous transactions are not supported on the platform.
Useful References
For the latest updates about Litecoin, you can visit:
Take Action on LTC
Check out LTC price today and start trading your favorite currency pairs.
Related articles
What Are Altcoins?
What Is Ethereum 2.0? Understanding The Merge
What Is Dogecoin?
What Is Litecoin? All You Need to Know About LTC
What Is Litecoin?
How Does Litecoin Work? Consensus Mechanism and Differences with Bitcoin
What Is the LTC Coin?
Is Litecoin a Good Investment?
How to Own LTC?
News on Litecoin
Useful References
Take Action on LTC
What Is Litecoin?
Before 2014, most of the alternative coins to bitcoin (altcoins) had the sole purpose of replicating the success of bitcoin by, for example, trying to modify the average time it takes to discover a new block, thus making transactions faster. In fact, there were numerous concerns over Bitcoin’s waiting times in confirming block transactions. However, almost all of the projects, which at the time were considered innovative, gradually failed and their related coins disappeared from the market. At the time, another major concern arose, since Bitcoin mining was largely performed by GPUs and CPU resources were becoming obsolete and worthless for mining. According to the main proponents of this theory, this risked causing high barriers to access bitcoin mining, and consequently an excessive centralization of its network. ASICs machines, designed for mining, were very expensive back at the time, but the first large bitcoin mining farms started emerging nevertheless. During this period, Litecoin was created with the aim of solving these alleged problems.
The Litecoin project was launched on October 7, 2011 by Charlie Lee, a former Google and Coinbase employee who graduated from MIT. Litecoin is considered by many to be the first altcoin, because on a technical level it is the result of a fork of the Bitcoin blockchain. Although it adopts the same code as Bitcoin, it prioritizes transaction confirmation speed to facilitate a higher transaction per second (TPS) and a shorter block generation time. Everything was designed to make Litecoin an ideal peer-to-peer currency for merchants and businesses who, according to Lee”… [the merchants] do not need transactions to be super secure. Most merchants can readily accept 1-confirmed transactions “. Lee agreed that fast confirmations are not necessarily as secure as bitcoin’s slower confirmations, but in any case he thought there was a need for a currency a little more ‘lite’ than bitcoin.
How Does Litecoin Work? Consensus Mechanism and Differences with Bitcoin
As already mentioned above, Litecoin is a product created by a fork of Bitcoin, meaning that it shares its code and certain features. In fact, Litecoin’s consensus mechanism is Proof of Work (PoW) operated through mining. However in Litecoin’s case, the algorithm in question is not SHA-256, but one called Scrypt. This hashing algorithm can generate new blocks roughly every 2.5 minutes, while the Bitcoin block confirmation time takes 10 minutes on average. Scrypt mining requires fewer resources but more memory than Bitcoin mining and has been adopted to benefit miners who use CPU cards, i.e. those with a normal home computer rather than ASICs owners, and therefore risk centralizing mining. However, the algorithm is not the only parameter that distinguishes Litecoin from Bitcoin. There is more, as shown below.
Mining difficulty- the degree of difficulty involved in discovering new bitcoin blocks through mining - adjusts every two and a half days instead of every two weeks.
Halving- the planned halving of the miners’ reward and which allows to avoid the inflation of the currency - occurs every 840,000 blocks instead of 210,000. However, this happens every four years for both coins.
Total supply- the maximum number of coins that can exist - is four times higher than bitcoin’s, with 84 million in comparison to 21 million.
These parameters, which however are not very far from those of Bitcoin, have allowed the Litecoin project to remain one of the most long-lived and well-known ones in the world of cryptocurrencies. The Litecoin blockchain has worked without major problems and has therefore demonstrated its security.
On many occasions, Litecoin has proved to be useful for Bitcoin development due to the similarities between the two blockchains. For instance, Litecoin has been used as a testing platform for updates to be adopted on the Bitcoin protocol. One of the main features implemented on the Litecoin blockchain before being added to Bitcoin was Segregated Witness (SegWit), which is an update that has improved the scalability of Bitcoin by optimizing the amount of data in a block.
Another important feature tested on Litecoin was the Lightning Network, which is another very efficient scaling solution that aims to provide an overlay to the main blockchain (layer 2) to accelerate the speed of transactions. This extra layer consists of user-generated payment channels that allow lower transaction fees, and is now mostly used on Bitcoin.
In addition, the Litecoin Foundation is working on integrating with a privacy-oriented protocol called MimbleWimble. This is a process for achieving improved transaction privacy by preventing individual inputs and outputs related to transactions from being identified. Simultaneously, the protocol should improve transaction scalability, as it eliminates some transaction information. This implementation has recently caused the spread of negative news about Litecoin, as the regulators seem to dislike the decreased transactions transparency. The risk is that they may block the purchase and sale of the LTC coin in crypto exchanges in the future.
What Is the LTC Coin?
LTC is the cryptocurrency that runs on the Litecoin blockchain. It is a form of digital money that can be used to transfer funds directly between individuals or businesses. Its maximum supply is 84 million units, of which 71.3 (85%) are already in circulation (October 2022). As already mentioned, LTC can be transferred by paying extremely low transaction fees, which makes it suitable for micro-transactions and point-of-sale payments. According to a research by Coinmarketcap, as of January 2021 more than 2,000 merchants and stores were accepting LTC across the globe, making it one of the most widely accepted cryptocurrencies.
Litecoin came out with a very small premine. Only 150 LTC were premined as the ‘genesis block’ (the very first one) and to confirm its validity, two subsequent blocks were initially mined. At the launch of the project, the block reward was 50 LTC.
Litecoin Use Cases
It is well known that Litecoin was not created to be a developer-oriented platform for building decentralized applications and smart contracts on it. The initial intention was to make LTC a ‘silver to Bitcoin’s gold’: a scarce, secure, and decentralized currency with faster transactions. There have been a few attempts to get the project into the DeFi/Gaming world, but without success. In 2020, a Litecoin-based fantasy role-playing game was launched in a partnership with CipSoft. The name was LiteBringer, and it was supposed to be a blockchain-based fantasy RPG. However, by the end of March 2022, its development was discontinued.
Today, LTC is popular among investors who rely on its limited supply and issuance reductions to speculate its price, or among traders who seek exposure to the crypto market’s movements without any negative surprises. LTC is also widely used to move funds between different exchanges or lending platforms to avoid high transaction fees.
Lastly, LTC is used to pay for goods and services, with the support of most cryptocurrency payment processors. Since 2021, a virtual Litecoin VISA debit card has become available to users. Thanks to the Litecoin Card, users can deposit LTC to their account and spend tokens wherever a VISA is accepted.
Is Litecoin a Good Investment?
Nowadays, it is difficult to say whether or not Litecoin is a good investment. In terms of technological development, LTC has lagged far behind many other projects that were born later.
However, LTC is a currency whose supply is programmed to be limited and deflationary, so it could appear as a safe haven to some investors, especially in times of inflation or economic crisis. Furthermore, because of the fast and cheap transactions, it could represent an attractive alternative to Bitcoin in developing countries where transaction fees may be the deciding factor on which cryptocurrency to support.
Last but not least, Litecoin’s blockchain has been proven secure enough to avoid 51% attacks and no vulnerabilities have been found in the code, so it has proven its reliability.
How to Own LTC?
One way to own LTC is to go through a centralized crypto exchange, so the first step is to create a Gate.io account and complete the KYC process. Once you have added funds to your account, check out the steps to buy LTC on the spot or derivatives market.
News on Litecoin
According to an announcement by cryptocurrency exchange Binance, on June 13, 2022, the platform is ending the support for Litecoin (LTC) transactions sent through the latest MimbleWimble (MWEB) upgrade.
At the beginning of the development of this upgrade, some developers had already expressed concern about the undesirable outcomes that this would lead to the adoption of Litecoin. This upgrade can enable users to achieve a high level of privacy while transacting on the network, which apparently neither regulators nor many trading services like. Binance was not the first company to take action against this upgrade: in fact, just a few days earlier major South Korean crypto exchanges delisted LTC from their platforms. Crypto exchanges are becoming increasingly regulated and controlled in the modern world, so it is no surprise that private crypto transactions are frowned upon. Gate.io also ended the support for MWEB Litecoin transactions, claiming anonymous transactions are not supported on the platform.
Useful References
For the latest updates about Litecoin, you can visit:
Take Action on LTC
Check out LTC price today and start trading your favorite currency pairs.
Related articles
What Are Altcoins?
What Is Ethereum 2.0? Understanding The Merge