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Litecoin (LTC) Definition

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What Is Litecoin (LTC)?

Litecoin (LTC) is an alternate cryptocurrency created in October 2011 by Charles “Charlie” Lee, a former Google engineer. Litecoin was tailored from Bitcoin’s open supply code however with a number of modifications. Like Bitcoin, Litecoin relies on an open-source international cost community that isn’t managed by any central authority. Litecoin differs from Bitcoin in facets like quicker block era price and use of Scrypt as a proof of labor scheme.

It’s thought-about to be among the many first altcoins, derived from Bitcoin’s unique open supply code.

Initially, it was a powerful competitor to Bitcoin. Nevertheless, because the cryptocurrency market has grow to be far more saturated and aggressive lately with new choices, Litecoin’s recognition has waned considerably.

Litecoin has all the time been considered as a response to Bitcoin. Actually, when Lee introduced the debut of Litecoin on a well-liked Bitcoin discussion board, he referred to as it the “lite model of Bitcoin.” For that reason, Litecoin has most of the similar options as Bitcoin, whereas additionally adapting and altering another facets that the event staff felt might be improved.

As of November 2021, 1 LTC is value round $215, making it the 14th-largest crypto with a market cap of just below $15 billion.

Key Takeaways

  • Litecoin is an early altcoin developed by former Google engineer Charlie Lee in 2011.
  • It had as soon as been referred to as the silver to Bitcoin’s gold, and at its peak was the third largest cryptocurrency by market cap.
  • As a result of its construction is much like Bitcoin’s, it has been used as a testnet or testing floor for enhancements that later have been utilized to Bitcoin.

Understanding Litecoin (LTC)

Like different decentralized cryptocurrencies, Litecoin will not be issued by a authorities, which traditionally has been the one entity that society trusts to difficulty cash. As an alternative of being regulated by a central financial institution and coming off the press on the Bureau of Engraving and Printing, Litecoins are created by an elaborate cryptocurrency process referred to as mining, which consists of processing an inventory of Litecoin transactions.

Litecoin was developed by Charlie Lee, a graduate of the Massachusetts Institute of Expertise (MIT) and a former Google engineer who grew to become excited by Bitcoin in 2011. In keeping with Lee, “In October of 2011, I used to be taking part in round with the Bitcoin codebase, and I suppose the in need of it was that I used to be simply attempting to create … a fork of Bitcoin. It was primarily a enjoyable facet venture.”

Like Bitcoin, the utmost variety of LTC is fastened. There’ll by no means be greater than 84 million Litecoins in circulation. Each 2.5 minutes, the Litecoin community generates a brand new block–a ledger entry of current Litecoin transactions all through the world. The block is verified by mining software program and made seen to any system participant (referred to as a miner) who needs to see it. As soon as a miner verifies it, the following block enters the chain, which is a file of each Litecoin transaction ever made.

There are incentives for mining Litecoin: the primary miner to efficiently confirm a block is rewarded with 12.5 Litecoins. As with Bitcoin, the variety of Litecoins awarded for such a process reduces with time. In August 2019, it was halved, and the halving will proceed at common intervals till the 84,000,000th Litecoin is mined. The Litecoin Basis estimates that will probably be round 2142 when the utmost of 84 million Litecoins will probably be reached.

Scrypt Proof-of-Work Algorithm

Bitcoin, Litecoin, and plenty of different cryptocurrencies use the proof-of-work (PoW) algorithm with the intention to safe their networks. Principally, PoW requires that one celebration proves to all the opposite taking part events within the community {that a} required quantity of computational effort has been expended. Not like Bitcoin, which makes use of the SHA-256 PoW hashing algorithm, Litecoin makes use of the much less resource-intensive Scrypt PoW algorithm.

Scrypt is a password-based key derivation operate. In keeping with Tarsnip, “the scrypt key derivation operate was initially developed to be used within the Tarsnap on-line backup system and is designed to be far safer in opposition to {hardware} brute-force assaults than different capabilities akin to PBKDF2 or bcrypt.”

Scrypt was developed by Lee particularly to make large-scale, custom-built {hardware} assaults on the foreign money tougher. Bitcoin’s SHA-256 algorithm doesn’t require a number of random entry reminiscence (RAM) as an obstacle to parallel processing, whereas Scrypt does.

In the beginning of the 2010s, as mining operations developed specialised {hardware}, just like the application-specific circuit (ASIC) to unravel SHA-256 hashing, it appeared that Bitcoin was weak to such an assault. By making Litecoin’s consensus algorithm reminiscence intensive, Lee sought to thwart the {hardware} arms race, although in apply that did not occur because the rise of GPUs answered the necessity for better RAM.

How Is Bitcoin (BTC) Completely different From Litecoin (LTC)?

Litecoin was launched with the intention of being the “silver” to Bitcoin’s “gold.” Like Bitcoin, Litecoin is a peer-to-peer internet currency. It’s a absolutely decentralized, open-source, international cost community. Lee developed Litecoin with the intention to enhance on Bitcoin’s shortcomings. The broader variations between the 2 cryptocurrencies are listed within the desk beneath.

BTC vs. LTC
      Bitcoin   Litecoin
  Creation   2009   2011
  Creator   Satoshi Nakamoto   Charlie Lee
  Coin Restrict   21 Million   84 Million
  Block Technology Time   10 Minutes   2.5 Minutes
  Algorithm   SHA-256   Scrypt
  Preliminary Reward   50 BTC   50 LTC
  Present Block Reward   6.25 BTC   12.5 LTC
  Rewards   Halved each 210,000 blocks   Halved each 840,000 blocks
BTC vs. LTC

Litecoin is designed to provide 4 occasions as many blocks as Bitcoin (1 new block each 2.5 minutes to Bitcoin’s 10), and it additionally permits for 4x the coin restrict, making its principal enchantment over Bitcoin to do with pace and ease of acquisition. Nevertheless, as a result of Litecoin makes use of Scrypt (versus Bitcoin’s SHA-256) as a proof-of-work algorithm, the usage of mining {hardware} akin to ASIC miners or a GPU mining rig requires considerably extra processing energy.

Litecoin ranks within the Prime 15 largest cryptocurrencies when it comes to market capitalization (although nonetheless remaining far beneath that of Bitcoin), and as of November 2021, it had greater than 69 million cash in circulation.

$14.5 Billion

Litecoin’s market worth as of November 2021, per CoinMarketCap.

Future Plans for Litecoin (LTC)

Litecoin has applied a number of options since its launch meant to enhance its transaction pace with out compromising the safety and integrity of the community.

SegWit

SegWit or Segregated Witness was first proposed for Bitcoin in 2015. It really works by “segregating” the digital sign knowledge (the “witness”) outdoors the bottom block within the blockchain. SegWit was developed to deal with Bitcoin’s scalability difficulty, however the proposal created deep controversy throughout the Bitcoin group.

In 2017, Litecoin adopted SegWit, and due to Litecoin’s similarity to Bitcoin, it labored as a testing floor or testnet for SegWit’s viability on the bigger Bitcoin community. The take a look at was successful, and Bitcoin adopted SegWit thereafter. Some opponents of the SegWit adoption who advocated for bigger Bitcoin block sizes created a Bitcoin exhausting fork that resulted in Bitcoin Cash.

Lightning Community

The Lightning Network is a second-layer expertise for bitcoin that makes use of micropayment channels to scale its blockchain’s functionality to conduct transactions.

Much like the SegWit instance, the implementation of the Lightning Community on Litecoin has been a testnet to show improvements are potential on Bitcoin. Charlie Lee has additionally argued that when “the Bitcoin blockchain is congested and the charges are excessive, it’s simple to make use of Litecoin to onboard onto the Lightning Community.”

MimbleWimble

MimbleWimble is a privateness protocol that builds on confidential transactions that encrypt or obscure info like transaction quantities. It’s argued that MimbleWimble can lower blocksize and improve scalability. Charlie Lee introduced in early 2019 that Litecoin would pursue MimbleWimble growth, and as of 2021, growth is underway.

What Is Litecoin and How Does It Work?

Litecoin is a peer-to-peer (P2P) digital foreign money, which implies it’s not ruled by a government. Litecoin’s community affords on the spot, near-zero price funds that may be carried out by people or establishments throughout the globe. Bitcoin, Litecoin, and plenty of different cryptocurrencies use the proof-of-work (PoW) algorithm with the intention to safe their networks. Principally, PoW requires that one celebration proves to all the opposite taking part events within the community {that a} required quantity of computational effort has been expended. Not like Bitcoin, which makes use of the SHA-256 PoW hashing algorithm, Litecoin makes use of the much less resource-intensive Scrypt PoW algorithm.

What Is Litecoin Used For

Litecoin can be utilized as a P2P technique for paying individuals anyplace on the earth with out an middleman having to course of the transaction. It will also be considered as a retailer of worth, or as a part of diversified crypto portfolio.

What Was LTC’s Unique Worth?

When it debuted in April 2013, 1 LTC was value round $4.30.

What Is the Highest Litecoin’s Worth Has Been?

On Might 10, 2021, LTC hit an all-time excessive of $410.26. Its all-time low of $1.15 was recorded on Jan. 14, 2015.

What Is LTC’s Halving Schedule?

Like Bitcoin, the creation of Litecoin tokens includes a course of referred to as mining. For taking part within the act of mining, miners are rewarded with Litecoin. A Litecoin halving refers to an occasion of halving the quantity of Litecoin rewards that miners are given for every block.

Litecoin halvings intention to protect Litecoin’s buying energy. The final Litecoin halving happened on August 5, 2019. On this date, the mining reward was decreased from 25 Litecoins per block to 12.5 Litecoins per block.

The following halving is predicted round August 2023.

How Many Litecoins Are There?

There’ll finally solely be 84 million Litecoins in circulation. In November 2021, there have been simply over 69 million Litecoins in circulation. That leaves lower than 15 million LTC left to be mined.

How Can I Commerce Litecoin?

LTC is obtainable on most crypto exchanges (e.g., Binance, Coinbase, Gemini, FTX) in opposition to each different cryptos like BTC & ETH, in addition to nationwide currencies like {dollars} and euros. You may also purchase LTC utilizing Robinhood and Paypal.

Investing in cryptocurrencies and different Preliminary Coin Choices (“ICOs”) is extremely dangerous and speculative, and this text will not be a suggestion by Investopedia or the author to spend money on cryptocurrencies or different ICOs. Since every particular person’s scenario is exclusive, a professional skilled ought to all the time be consulted earlier than making any monetary selections. Investopedia makes no representations or warranties as to the accuracy or timeliness of the knowledge contained herein. As of the date this text was written, the writer doesn’t personal Litecoins.


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