The world’s first altcoin, Litecoin, has a very interesting history. In this article, we cover everything you need to know about the coin , who founded it and what is up with all these forks ? Also, how can you buy some?
What Is Litecoin?
Litecoin ( LTC ) was created in 2011 by Charlie Lee, a former employee of Google , who decided to create his own cryptocurrency. The idea behind Litecoin was that it should be silver to Bitcoin ‘s gold : cheaper and faster to mine with less volatility during trade .
Litecoin is one of the first altcoins ever created, which means alternatives to Bitcoin. Today, there are over a thousand different coins, which differ from each other in mining algorithm, distribution model and purpose. Some of the most popular altcoins include Ethereum, Ripple , Dash and Monero .
In this article we go through everything you need to know about Litecoin:
Who founded it ? Where did the name come from ? How does it compare to Bitcoin ? and most importantly how you can buy some.
Who Founded Litecoin?
Litecoin is a decentralized peer-to-peer coin with no central authority or developers , similar to Bitcoin . This means that anyone who wanted could participate in the development process and suggest changes.
Lee published a post on Coinbase titled open source fork of Bitcoin , in which he stated that he wanted Litecoin to be the Silver to Bitcoin ‘s Gold. He decided to make several changes, including decreasing block time from 10 minutes to 2.5 and increasing total supply of coins. These measures allow for faster transaction times and more tokens . See comparison between Litecoin and Bitcoin below:
Comparison between Litecoin and Bitcoin
Litecoin has almost all of the same features as Bitcoin, with a few notable differences:
Algorithm – Scrypt vs SHA-256 : The algorithms that Litecoin and Bitcoin use to secure their networks are fundamentally different. Namely, Litecoin uses the ‘Scrypt’ algorithm, which is more memory intensive than Bitcoin’s SHA-256. This effectively doubles the cost to attack the network with Scrypt-based currencies , because you have to buy twice as much memory. We explain this in greater detail here . Supply – 84 million vs 21 million : Since Litecoin was intended to be silver to Bitcoin’s gold, its creator decided to increase the total supply of coins to make it more available. Bitcoin’s final coin will be mined around 2140 , while Litecoin reached 84 million tokens in 2018 . Transaction time – 2.5 minutes vs 10 minutes : Since transactions are processed every 10 minutes, Bitcoin can process approximately 3-4 transactions per second maximum. Litecoin processes transactions every 2.5 minutes, which results in their network being able to process up to 56 transactions per second .
At the time of writing (Oct 2018) , Bitcoin has a market cap of $108 billion and is trading at $6400, while Litecoin has a market cap of $3 billion and is trading at $52 .
How Does Litecoin Work?
Litecoin works exactly like Bitcoin – it is a decentralized peer-to-peer coin with no central server or authority. Transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. In order to reward the computational costs of both processing the transactions as well as securing the network, there is a reward system that distributes newly created Litecoin.
Since Litecoin and Bitcoin use different algorithms, they are mined in different ways. Mining is when computers on the network compete to solve mathematical equations linked to transactions in order to verify them and add their record ( block) to the blockchain . The first computer to solve a transaction block receives a reward, which is currently at 25 Litecoin.