For beginners, it wouldn’t be wrong to say that Litecoin is a lighter version of Bitcoin. Lying at 7th on the top cryptocurrencies sorted based on their market cap on coinmarketcap (At press time), Litecoin is a pretty well-reputed currency with a huge amount of traders all around the globe. Let’s dive deeper into what Litecoin is.
Once again, Litecoin is a lighter version of BTC. It is basically a fork of Bitcoin which was made with a mindset of bringing a clone of Bitcoin to the general public for daily use. Litecoin was one of the first forks of Bitcoin, which was released on October 7th, 2011 and went live on October 11th, 2011.
While Bitcoin is thought to be used for storing wealth, Litecoin can be used to make daily transactions due to its lower transaction price. It is said to be silver as compared to gold (Bitcoin). Litecoin also focussed on contributing to solving the scalability issue by offering over 50 tps which is better than both Ethereum and Bitcoin by a mile. The aim was also to facilitate the people so that they could make transactions on a daily basis by giving them a much lower transaction fee of almost $0.02.
The founder of Litecoin Charlie Lee, was formerly a Google employee and after laying the foundations of Litecoin, he also worked on the engineering side of Coinbase. He is also a well-known personality in crypto who also happens to be very active on his social media and has an open personality as compared to Satoshi Nakamoto.
Since Litecoin is a fork of BTC, it is often compared to BTC and what was the need for a fork when there are so many similarities. Hence, a few of the differences are given below.
Litecoin vs BTC
- Both Bitcoin and Litecoin use the same mining algorithm i.e. PoW. Litecoin aims to have a more evenly distributed hashpower.
- Litecoin uses a simpler hashing algorithm, Scrypt, compared to that of Bitcoin which uses SHA-256 (discussed below).
- The supply of LTC is 84 million litecoins, compared to 21 million bitcoin, which is almost 4 times that of BTC.
- Faster, so it can be used for payments and daily use rather than storing money.
- Block addition for Litecoin takes 2.5 minutes which is four times faster than Bitcoin.
- Much higher tps than Bitcoin.
Litecoin aims to make the mining more decentralized than that of Bitcoin. Although both use Proof of Work, but Litecoin helps to eliminate the need for very high processing powers by using simpler hashing algorithms.
Proof of Works requires a miner to solve a difficult cryptographic puzzle to validate a transaction, and based on the consensus formed by a number of nodes (miners) the transaction is validated, added to the block by the miner and in return, the miner is rewarded for solving the puzzle first. In the case of Bitcoin, the puzzles are much more complex because of the limited supply. This has made the mining of Bitcoin more centralized than decentralized, as a pool of miners with higher computing powers can add to the blocks while miners with lower computing powers lose the race. Litecoin, however, has a much larger supply, due to which they can have simpler hashing algorithms which can be solved by all kind of miners and hence, contributes to the decentralization.
According to the website,
Miners are currently awarded with 25 new litecoins per block, an amount which gets halved roughly every 4 years (every 840,000 blocks).
Litecoin is a well-reputed currency, which stands at number 7 on the top currencies on coinmarketcap based on their market caps. It is currently listed on almost all the top exchanges of crypto including Coinbase, which is known for being very selective with their listings and contains only 5 currencies cherry picked out of the top currencies.
Currently, the currency is being traded at $31.91. The team has allowed users to download free desktop wallets to store their LTCs.
The team of LTC contains well reputed crypto names and developers as shown below,
Due to the lower costs and higher speeds compared to Bitcoin. It can be easily said that the adoption rates for LTC can be higher in the future with its use cases ranging widely from being a store of money to daily transactions.