CryptoBasics: Litecoin

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Background

Litecoin is a decentralized, fully open-source platform that was developed in late 2011 by ex-Google employee Charlie Lee. Its architecture is nearly identical to that of Bitcoin, however, Litecoin can conduct transactions faster due to a shorter block generation time.

An advanced algorithm called Scrypt is used to regulate the mining process, which makes more coins available within each block that is mined – this results in a lifetime coin supply that is around four times that of Bitcoin.

As of February 2018, Litecoin (LTC) was the 5th largest cryptocurrency in the world in terms of market capitalization, with a market cap in excess of $12b. Litecoin’s founders see their network operating as complementary to the Bitcoin network, rather than replacing it altogether.

Team Members

Litecoin’s team lead and founder is Charlie Lee, who has been heading development efforts since the project’s inception in 2011.

The project also has several full and part-time developer that are fully dedicated to developing the next-generation Litecoin protocol.

There are also over a dozen volunteer developers who donate their spare time to optimizing Litecoin’s code, testing new features, and resolving any bugs in the code.

Litecoin is also supported by the Litecoin Foundation, a Singapore-based organization that is focused on pushing the underlying technology forward for the good of society by developing cutting-edge blockchain applications on the platform.

What is Litecoin?

As a fork of Bitcoin Core, Litecoin is in many ways quite similar to its predecessor. The aim of releasing the Litecoin platform was to create a network that was complementary to Bitcoin, while also having increased performance across a number of metrics.

One of the key differentiators for Litecoin is its decreased transaction time and lower transaction fees. This is due to its highly efficient network, which has a shorter block transaction time than Bitcoin.

Litecoin is one of the most established cryptocurrencies in terms of trading volume, and has a large amount of industry support within the crypto community.

Despite these advantages, Litecoin doesn’t have the same capabilities of many of its competitors (such as running Dapps). As a result, despite the numerous improvements made to the protocol over the years, in many ways it’s still seen as a lightweight, streamlined version of Bitcoin.

Technology

The investment vehicle of the Litecoin platform is the LTC token. LTC tokens can be purchased on most major cryptocurrency exchanges and can be stored in most crypto wallets as well.

Litecoin’s platform and network architecture, while strikingly similar to that of Bitcoin, nevertheless possesses several key differentiators which distinguish it from other competing cryptocurrencies:

  • Litecoin has a higher transaction volume than Bitcoin, on account of its decreased block generation time, which runs about 2.5 minutes, as opposed to Bitcoin’s 10 minute block generation time.
  • Litecoin was one of the first cryptocurrencies to implement both Lightning and SegWit on its network. This has contributed to higher transaction speeds and decreased processing time.
  • The cryptocurrency is easier to mine than Bitcoin, because Litecoin uses a Scrypt algorithm to that enables parallel processing – this lowers the hardware requirement for those looking to mine the cryptocurrency, in addition to leveling the playing field for miners using different types of hardware. In addition, Litecoin has four times the total supply of coins as that of Bitcoin.
  • Litecoin benefits from a high degree of industry support, ranging from cryptocurrency ATMs to online merchants. It has a highly active developer community, which is constantly working on improvements to the platform.

Litecoin remains one of the fastest cryptocurrencies in terms of processing time, and its active developer community will likely ensure its performance continues to improve in the coming year.

Future Plans

In February 2018, a long-anticipated hard fork of Litecoin occurred, as a sidechain called Litecoin Cash (LCC) was created. Despite the hard fork, Litecoin founder Charlie Lee has himself called the hard fork a “scam” that offers no real value to the development community. Litecoin Cash’s creators, however, claim that transaction times on the new cryptocurrency will be significantly faster.

Despite the recent uncertainty, Litecoin’s development community appears active as ever, with several projects underway to make the platform even more efficient.

To truly break out as an innovative cryptocurrency, however, Litecoin’s development community will likely need to innovate even further on the current platform to create additional use cases for the cryptocurrency.

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