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What is Litecoin?
Litecoin is a peer to peer payment network that uses proof of work to confirm transactions, with a fixed maximum supply of 84 million LTC.
Category | Layer 1 payment network (proof of work) |
|---|---|
Launch year | 2011 |
Genesis date | 2011-10-08 |
Consensus mechanism | Proof of Work (PoW) |
Hashing algorithm | Scrypt |
Block generation time | About 2.5 minutes |
Max supply | 84,000,000 |
Circulating supply | 77,065,864.48347135 LTC |
Main use case | Medium of exchange for peer to peer payments and microtransactions |
Official website | https://litecoin.org/ |
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What is Litecoin (LTC)?
Litecoin (LTC) is one of the most traded cryptocurrencies and was released in 2011, two years after Bitcoin. Whereas Bitcoin is often compared to gold, Litecoin is seen as silver. The technology of Litecoin is based on that of Bitcoin. And Litecoin has gone through rapid growth since early 2017.
How can I use Litecoin?
Litecoin can be used to pay for products and services. Being one of the most prominent cryptocurrencies in the world, an increasing number of companies have started accepting Litecoin payments. The mission of Litecoin‘s founders is to create a cryptocurrency that can be used for small daily transactions, both online and offline.
Who founded Litecoin?
Litecoin was invented by Charlie Lee, a San Francisco-based entrepreneur and former Google employee. Lee envisioned a coin that could be used on a day-to-day basis, whereas he saw Bitcoin as more of a savings vehicle. Lee still works on Litecoin full time, although he sold his own LTC to avoid any suspicions of a conflict of interest and to create more transparency about his role in the development of Litecoin. Being a highly visible figure in the cryptocurrency market, this has helped Litecoin gain popularity all over the world.
Litecoin vs. other cryptocurrencies
The technology that both Litecoin and Bitcoin rely on is near-identical, although some important differences exist. An important difference for users is the average time it takes for a transaction to be confirmed. It takes about 10 minutes for an average Bitcoin transaction to get through. For Litecoin, however, this is a mere 2,5 minutes. In addition, Litecoin is mined using a different algorithm type than Bitcoin, which can be read about below. Another difference is Litecoin having more coins on the market and a higher maximum amount of coins to be mined. The price per Litecoin is, therefor lower than the price per Bitcoin. It also avoids having to trade with a fraction of the coin, which can be confusing.
What does the future hold for Litecoin?
As with all cryptocurrencies, it is hard to predict where Litecoin will stand in 10 or even just 2 years. For some time, however, Litecoin has established itself as one of the more popular cryptocurrencies available on the market. It seems that Litecoin is here to stay.
How is Litecoin created?
Litecoin uses an algorithm called ‘Scrypt‘ for mining. In contrast to Bitcoin, which uses the processor-intensive SHA-256, Scrypt is more memory-intensive for systems. This means it is relatively easier to mine Litecoin than Bitcoin with a regular computer system. This has resulted in Litecoin becoming a fairly accessible cryptocurrency for beginning crypto enthusiasts, contributing to its popularity.
Can I earn money with Litecoin?
Yes, it is possible to make money with Litecoin. By the end of 2017, one LTC was worth about 80 times as much as it was during the start of 2017. However, as with all cryptocurrencies, Litecoin is volatile and constantly moving. It is possible to make a large profit in little time, but it is also possible to lose a large portion of your investment. Be aware of the risks and always trade responsibly. Sell, buy and trade Litecoin LTC at Coinmerce.
Proof of work in plain language
In proof of work, miners use computing power to solve puzzles. When a miner finds a solution, it earns the right to propose a new block. Other participants verify that the proposed block follows the rules. Once enough of the network accepts it, the block becomes part of the blockchain history. For you as a holder, this matters because the network security depends on miners continuing to participate. If mining becomes unprofitable, the network can still run, but the economics and security assumptions can change over time.
Mining rewards and halving
Litecoin issues new tokens to miners as block rewards. The idea is that miners get compensated for doing the work of confirming transactions. Those rewards undergo a halving event approximately every four years. Halving reduces how many new LTC are created, which is one reason Litecoin has a fixed maximum supply of 84 million. This supply schedule does not guarantee price outcomes, but it does set a predictable issuance pattern that many investors like to understand.
Privacy with MimbleWimble Extension Blocks
Litecoin includes MimbleWimble Extension Blocks, which are designed to improve privacy by allowing transaction details to be hidden. In practice, privacy depends on whether wallets and transactions use those features. If you send LTC without privacy extensions, transaction details can still be visible on the public ledger. If you use privacy extensions, the goal is to make it harder to link transaction details to specific activity. As a user, it helps to understand that privacy is not automatic. You should check how your wallet handles privacy features if that matters to you.
What makes LTC a payment token
Litecoin is positioned as an open source payment network. That means the core user experience is about sending and receiving value on the network. The network supports microtransactions through smaller units called litoshis. This can make it easier to pay for small goods and services compared with using only whole tokens. Even if you mainly hold LTC, understanding its payment purpose can help you judge whether it is still being used in the way the network was designed.
Understand Litecoin step by step
What is Litecoin?
If you want to learn about Litecoin, read all about it in the What is overview.
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