Litecoin (LTC) Price and Analysis

Litecoin Overview

Litecoin was created by Charlie Lee, a Google employee and former Engineering Director at Coinbase, and was released on October 7th, 2011. Litecoin is an early fork of Bitcoin Core created to handle some of the issues anticipated by Bitcoin, even in the early days when Bitcoin’s limitations were less of a problem. From the beginning, Charlie Lee and his team have stated that they intended Litecoin to be the ‘silver’ to Bitcoin’s ‘gold’.

Despite being a fork of Bitcoin, the two digital coins do have their differences. Litecoin has a decreased block generation time of 2.5 minutes, compared to Bitcoin’s 10 minutes. It also has an increased number of maximum coins. In 2014 Litecoin had the second highest market cap of any mined cryptocurrency after Bitcoin.

One of the key differences between the two is the maximum number of coins available. For Bitcoin, the maximum number of coins is 21 million, whereas Litecoin’s maximum is 84 million, a significant increase.

The hashing (mining) algorithm in Bitcoin Core is SHA-256, for Litecoin this was changed to Scrypt. Bitcoin uses SHA-256 to create hashes in the blocks on the blockchain that represent the data being recorded. SHA-256 is highly accurate and secure, but it is also very slow which is why it takes Bitcoin 10 minutes to generate one block.

The alternative Scrypt algorithm was created along with Litecoin and is less complex but does not require a high hash rate, meaning the block generation time is significantly reduced. A faster block time also reduces the risk of double spending attacks. A double spend attack is when a miner or group of miners try to spend their Bitcoin on the blockchain twice.

Litecoin also has faster confirmation times than Bitcoin which may not seem like a huge advantage on paper but in practice makes it favorable. Most people are impatient and we live in a world of instants, you can get most things instantly or very quickly, so waiting long periods of time for confirmation when there’s a faster alternative is just common sense.

Essentially, Litecoin is taking the good technology from Bitcoin and creating a fork to expand and improve on that technology to give it increased longevity. Bitcoin was the first cryptocurrency and remains highly popular but it has several limitations that make it difficult to scale effectively.

Cryptocurrency is all about scalability – the creators want as many people using their crypto as possible. Crypto enthusiasts also want to live in a world where crypto is a viable option for all payments and this will only be possible if the cryptocurrency can scale to worldwide levels. Litecoin handles the scalability better than Bitcoin, but it’s still not perfect.